They are the first-priority senior secured term loan facility maturing in 2028 and the first-priority senior secured term loan facility maturing in 2027.
2% reduction in interest expense
Carnival plans to use the proceeds of the €500m 5.75% notes offering and cash on hand to redeem its €500m 7.625% senior unsecured notes due 2026, resulting in a nearly 2% reduction in interest expense.
As part of the separate repricing transaction, the company expects to make a partial prepayment of $500m under the 2028 secured term loan racility and a partial prepayment of $300m under the 2027 secured term loan facility.
The notes offering, the redemption of the 2026 euro unsecured notes and the repricing transaction are a continuation of Carnival Corp. & plc's ongoing debt and interest expense reduction and capital structure simplification.
$30m interest savings plus ...
Together, the reduction in both interest rates and total debt is expected to result in a reduction of net interest expense of over $30m for the remainder of 2024 and over $50m on an annualized basis.
The notes offering and repricing transaction are expected to close on April 25, while the previously announced redemption of the 2026 euro unsecured notes is expected to occur on April 26, conditioned on the closing of the notes offering.
New interest rates
After the repricing, the 2028 secured term loan facility will bear interest at a rate per annum equal to SOFR with a 0.75% floor, plus a margin equal to 2.75%. The 2027 secured term loan facility will bear interest at a rate per annum equal to SOFR with a 0.75% floor, plus a margin equal to 2.75%.
PJT Partners is serving as independent financial advisor to Carnival Corp. & plc.
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