Carnival closes $3 billion bond offering to refinance debt

Carnival Corporation (NYSE: CCL) announced it has closed a $3 billion offering of 5.75% senior unsecured notes due 2032. The cruise company will use the proceeds to fully repay borrowings under its senior secured term loan facility and to redeem $2.4 billion of existing 5.750% senior unsecured notes due 2027.

The notes will pay interest semi-annually on February 1 and August 1 of each year, beginning February 1, 2026, and will mature on August 1, 2032. The notes are guaranteed by Carnival plc and certain subsidiaries that also guarantee the company's first-priority secured indebtedness.

The company issued a conditional notice of redemption for $2.4 billion of the 2027 notes, which will be redeemed on July 17, 2025, at 100% of the principal amount plus a make-whole premium and accrued interest.

Chief Financial Officer David Bernstein stated the transaction continues the company's strategy to deleverage and manage future debt maturities. According to the press release, Carnival has refinanced nearly $11 billion of debt and prepaid $1.1 billion of debt this year. The company has reduced its secured debt by nearly 70% since its peak in the fourth quarter of 2021.

The notes were offered to qualified institutional buyers under Rule 144A and to non-U.S. investors under Regulation S. The securities were not registered under the Securities Act of 1933.

The transaction represents part of Carnival's effort to reduce secured debt and work toward investment grade credit status. The indenture governing the notes includes investment grade-style covenants.

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