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Carnival prices $1b convertible notes due 2027 to refinance 2024 maturities

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Carnival Corp. priced a private offering of $1b 5.75% convertible senior notes due 2027 as part of the company's 2024 refinancing plan.

The initial conversion rate per $1,000 principal amount of convertible notes is equivalent to 74.6714 shares of common stock, or a conversion price of approximately $13.39 per share, subject to adjustment in certain circumstances.

20% premium

The initial conversion price represents a premium of approximately 20% over the last reported CCL sale price on the New York Stock Exchange Nov. 15.

Differing from its existing convertible securities, Carnival has a cash redemption provision if the stock price exceeds $17.41 beginning on or after Dec. 5, 2025. The company may redeem for cash all or part of the convertible notes if the last reported CCL sale price exceeds 130% of the conversion price then in effect for at least 20 trading days, whether or not consecutive.

Before Sept. 1, 2027, the notes will be convertible at the holder's option upon satisfaction of certain conditions and during certain periods. After that, the notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

Cash, shares or a combination

Upon conversion, Carnival will pay or deliver, at its election, cash, shares of common stock or a combination of cash and shares.

The notes will be fully and unconditionally guaranteed on a senior unsecured basis by Carnival plc and certain other subsidiaries that own or operate vessels and material intellectual property.

Option to purchase additional notes

The company granted the initial purchasers of the notes an option to buy up to an additional $150m in notes on or before Nov. 30.

Use of proceeds

The company expects to use proceeds of the offering to make principal payments on debt and for general corporate purposes.

The notes are being offered only to instituttional investors outside the US.

PJT Partners is serving as independent financial advisor to Carnival Corp. & plc.

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