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Friday, December 3, 2021

Carnival to Raise $1.26 Billion in Debt to Deal with COVID-19 Impact

Maritime Activity Reports, Inc.

July 15, 2020

© dbvirago / Adobe Stock

© dbvirago / Adobe Stock

Carnival Corp is planning to raise about $1.26 billion in a bond offering, the beleaguered cruise operator said Wednesday as it struggles to stay afloat after the COVID-19 pandemic impacted its business.

The bond offering is split into a $775 million tranche paying an annual coupon of 10.5%, and 425 million euro-tranche ($484.93 million) paying 10.125%.

The senior secured notes are due 2026, with the offering expected to close on July 20, Carnival said.

Carnival said the notes will be secured by a second-priority lien, a lower priority of repayment in case of bankruptcy or liquidation of assets.

The cruise business is one of the worst hit from the pandemic and many cruise operators have been forced to raise billions through various means, even by pledging ships and private islands.

Carnival has raised over $10 billion through a series of financing transactions since its voyages were paused, enough to withstand another full year in a zero-revenue scenario, Chief Executive Officer Arnold Donald had said earlier this month.

A number of U.S. companies, including Macy’s Inc are also pledging their assets and properties to raise money and clear debt as businesses reopen after a long government mandated lockdown.

(Reporting by Praveen Paramasivam; Editing by Arun Koyyur)

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