Carnival launches $2 billion notes offering to refinance debt

Carnival Corporation (NYSE/LSE: CCL; NYSE: CUK) commenced a private offering of $2.0 billion in senior unsecured notes expected to mature in 2032, the company announced Monday.

The cruise company plans to use proceeds from the notes offering to fully repay borrowings under its first-priority senior secured term loan facility maturing in 2028. The company also intends to use remaining proceeds and cash on hand to partially redeem $1.4 billion of its 5.750% senior unsecured notes due 2027, subject to the final size of the offering.

The partial redemption of the 2027 notes will be conditioned on the closing of the new notes offering. The indenture governing the new notes is expected to include investment grade-style covenants.

The notes will be offered only to qualified institutional buyers under Rule 144A of the Securities Act of 1933 and to non-U.S. investors outside the United States under Regulation S. The notes will not be registered under the Securities Act or state securities laws.

The transaction represents part of Carnival's efforts to manage future debt maturities and reduce secured debt. The company stated the offering amount is subject to change due to various factors.

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