Carnival (NYSE:) Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) today announced that Carnival Corporation (the "Company") intends to commence the marketing of a new senior secured first lien term loan B facility (the "New First Lien Term Loan") with an original principal amount of $1.0 billion, expected to mature in 2027. In conjunction with the New First Lien Term Loan, and subject to market and other conditions, the Company may raise $500 million of other secured debt maturing in 2029 (together with the New First Lien Term Loan, the "Refinancing Transactions"). The Company intends to use the proceeds from the Refinancing Transactions to repay a portion of the borrowings under the Company's existing first-priority senior secured term loan facility maturing in 2025.
After the closing of the Refinancing Transactions, the Company intends to redeem all of the Company's 10.500% second-priority senior secured notes due 2026 and 10.125% second-priority senior secured notes due 2026 (collectively, the "2026 Notes"), saving over $120 million in interest expense on an annualized basis. The $1.2 billion of redemptions will be conditioned on the closing of the Refinancing Transactions. The Company expects to use cash on hand to finance the redemptions. This press release does not constitute a notice of redemption with respect to the 2026 Notes.
The Company's Chief Financial Officer David Bernstein commented: "Given the confidence we have in our business and its cash flow generation, we plan to retire $1.2 billion of our highest cost debt. In connection with this retirement, we plan to extend some of the lowest cost public debt in our portfolio. This is yet another step forward in our deleveraging journey, building on the $1.4 billion we already early retired this year. With this debt repayment, we now expect our year end debt balance to be less than $32.0 billion, an improvement over the November 30, 2023 debt balance of less than $33.0 billion provided in our June guidance."
This press release shall not constitute an offer to sell or the solicitation of an offer to purchase any security and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such offering, solicitation or sale would be unlawful.