The net proceeds, together with cash on hand, will be used to redeem the company's €500m 7.625% senior unsecured notes due 2026, resulting in a reduction in interest expense of nearly 2%.
Secured term loans repriced
In addition, Carnival closed its previously announced repricing of approximately $1.75b of first-priority senior secured term loans under its first-priority senior secured term loan facility maturing in 2028 and approximately $1b of first-priority senior secured term loans under its first-priority senior secured term loan facility maturing in 2027.
As part of this repricing transaction, the company made 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.
$50m savings on annualized basis
All these actions are a continuation of Carnival's ongoing debt and interest expense reduction and capital structure simplification. Together, the lower interest rates and total debt are expected to result in a reduction of net interest expense of more than $30m for the remainder of 2024 and over $50m on an annualized basis.
The 2028 repriced loans bear annual interest equal to SOFR with a 0.75% floor, plus a margin equal to 2.75%. The annual interest for the 2027 repriced loans will be equal to SOFR with a 0.75% floor, plus a margin equal to 2.75%.
PJT Partners served as independent financial advisor to Carnival Corp. & plc.
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