Carnival Corp has priced a private note offering at an interest rate that is higher than previous offering after increasing it to $2bn.
The move came after the Josh Weinstein-led owner of 95 ships announced a private offering on Tuesday in which it would sell $1.25bn in senior priority notes that will mature in 2028.
On Wednesday, the New York-listed cruise major revealed that the offering was increased to $2.03bn “due to strong investor demand” and that the interest rate was set at nearly 10.4%.
The deal comes a year after Carnival issued $2bn in unsecured notes at a coupon rate of 6%.
Carnival said that the latest notes will pay interest semi-annually on 1 May and 1 November of each year, beginning on 1 May 2023, and are priced at 98.465% of their face value. They are callable on 1 May 2023.
The unsecured notes offering is expected to close on 25 October, Carnival said. The company is shifting 12 unencumbered vessels to Carnival Holdings, the subsidiary that is issuing the bonds.
PJT Partners is acting as Carnival’s financial advisor for the offering.
The Miami-based shipowner plans to use the offering’s net proceeds to repay what it has drawn on a $1.86bn revolving credit facility with an annual interest rate equal to Libor with a 0.75% floor plus a 3% margin.
The loan facility, which was repriced in May 2021, also includes a €800m loan with an annual interest rate equal to Euribor with a 0% floor and a 3.75% margin.
Carnival’s total debt stood at $34.8bn as of 31 August and had $27.9bn in debt maturing by the end of 2029, according to regulatory filings.
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