Carnival (NYSE:) Corporation & plc (CCL; NYSE: CUK) today announced that Carnival Corporation (the "Company") will issue conditional notices of redemption for the entire outstanding principal amount of the $775 Million 10.500% second-priority senior secured notes due 2026 (the "2026 USD Second Lien Notes") and €425 Million 10.125% second-priority senior secured notes due 2026 (the "2026 Euro Second Lien Notes") to be redeemed on August 11, 2023 and August 12, 2023, respectively. The Company will use cash on hand to finance the redemptions and expects to save 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 described below.
The Company has also priced its private offering of $500 million aggregate principal amount of 7.00% first-priority senior secured notes due 2029 (the "Notes") and successfully completed the syndication of its upsized $1.3 billion senior secured first lien term loan B facility (the "New First Lien Term Loan" and together with the offering of the Notes, the "Refinancing Transactions"). The Refinancing Transactions are expected to close on August 8, 2023, subject to customary closing conditions and the execution of definitive documentation. 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.
The Notes will pay interest semi-annually on February 15 and August 15 of each year, beginning on February 15, 2024, at a rate of 7.00% per year. The Notes will mature on August 15, 2029. The Notes will be fully and unconditionally guaranteed on a first-priority senior secured basis, jointly and severally, by Carnival plc and certain of the Company's and Carnival plc's subsidiaries that also guarantee our other first-priority secured indebtedness, our second-priority secured indebtedness, certain of our unsecured notes and our convertible notes. Additionally, the Notes and the related guarantees will be secured by a first-priority lien on the collateral, which generally includes pledges on the capital stock of each subsidiary guarantor, mortgages on a substantial majority of the vessels and related vessel collateral, material intellectual property and pledges over other vessel-related assets including inventory, trade receivables, computer software and casino equipment.
The New First Lien Term Loan will bear interest at a rate per annum equal to SOFR with a 0.75% floor, plus a margin equal to 3.00%, and will mature in 2027. The New First Lien Term Loan is expected to be implemented via a new term loan agreement. Our obligations under the New First Lien Term Loan will be fully and unconditionally guaranteed on a first-priority senior secured basis, jointly and severally, by the same guarantors that guarantee the Notes, and will be secured by a first-priority lien on the same collateral that secures the Notes and the related guarantees.
PJT Partners is serving as independent financial advisor to Carnival Corporation & plc.
This press release does not constitute a notice of redemption with respect to the 2026 USD Second Lien Notes or the 2026 Euro Second Lien Notes.
The Notes are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside the United States, only to non-U.S. investors pursuant to Regulation S under the Securities Act.
The Notes will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.
This press release shall not constitute an offer to sell or the solicitation of an offer to purchase the Notes or any other securities and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such offering, solicitation or sale would be unlawful.
