TIDMCCL
Carnival Corporation & plc Announces Closing of 5.75% Convertible Senior Notes
due 2027 for Refinancing 2024 Maturities
MIAMI, Nov. 18, 2022 -- Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK)
announced that Carnival Corporation (together with Carnival plc, the
"Company," "we," "us," or "our") has closed its previously announced private
offering (the "Convertible Notes Offering") to qualified institutional buyers
of $1 billion aggregate principal amount of its 5.75% Convertible Senior Notes
due 2027 (the "Convertible Notes"). Carnival Corporation has granted the
initial purchasers of the Convertible Notes an option to purchase on or before
November 30, 2022, up to an additional $150 million aggregate principal amount
of Convertible Notes.
The Convertible Notes were issued pursuant to an Indenture, dated as of
November 18, 2022 (the "Indenture"), among Carnival Corporation, Carnival plc,
the subsidiary guarantors party thereto and U.S. Bank Trust Company, National
Association, as trustee. The Convertible Notes will pay interest semi-annually
on June 1 and December 1 of each year, beginning on June 1, 2023, at a rate of
5.75% per year. The Convertible Notes will mature on December 1, 2027, unless
earlier repurchased, redeemed or converted. No sinking fund is provided for the
Convertible Notes.
The Convertible Notes are fully and unconditionally guaranteed, jointly and
severally, on a senior unsecured basis by Carnival plc and certain of Carnival
Corporation's and Carnival plc's subsidiaries that guarantee substantially all
of the Company's indebtedness (the "Subsidiary Guarantors"). In the future,
subject to certain exceptions, each of Carnival Corporation's and Carnival
plc's subsidiaries (other than the Subsidiary Guarantors) that becomes an
issuer, borrower, obligor or guarantor under certain other indebtedness for
borrowed money of Carnival Corporation, Carnival plc or any other Subsidiary
Guarantor, in each case, in an aggregate principal amount in excess of $250
million, will be required to guarantee the Convertible Notes; provided, that
any such subsidiary will not be required to become a guarantor if such
subsidiary would not be required to provide a guarantee under certain of
Carnival Corporation's, Carnival plc's or any Subsidiary Guarantor's capital
markets indebtedness (which indebtedness excludes Carnival Corporation's 5.75%
Convertible Senior Notes due 2023 and the 10.375% Senior Priority Notes due
2028 issued by Carnival Holdings (Bermuda) Limited).
The Convertible Notes are convertible by holders, subject to the conditions
described below, into cash, shares of the common stock, par value $0.01 per
share, of Carnival Corporation (the "Common Stock"), or a combination thereof,
at Carnival Corporation's election. The initial conversion rate for the
Convertible Notes is 74.6714 shares of Common Stock per $1,000 principal amount
of Convertible Notes, equivalent to an initial conversion price of
approximately $13.39 per share of Common Stock. The conversion rate is subject
to customary anti-dilution adjustments but will not be adjusted for any accrued
and unpaid interest. In addition, holders who elect to convert their
Convertible Notes in connection with certain corporate events or a notice of a
tax redemption are, under certain circumstances, entitled to convert at an
increased conversion rate.
The Convertible Notes are convertible at any time prior to the close of
business on the business day immediately preceding September 1, 2027 only under
the following circumstances:
1. during any fiscal quarter commencing after the fiscal quarter ending on
February 28, 2023 (and only during such fiscal quarter), if the last
reported sale price per share of the Common Stock for at least 20 trading
days (whether or not consecutive) during the period of 30 consecutive
trading days ending on the last trading day of the immediately preceding
fiscal quarter is greater than or equal to 130% of the conversion price on
each applicable trading day;
2. during the five consecutive business day period after any five consecutive
trading day period (the "measurement period") in which the trading price
per $1,000 principal amount of Convertible Notes for each trading day of
the measurement period was less than 98% of the product of the last
reported sale price per share of Common Stock and the conversion rate on
each such trading day;
3. after our delivery of a notice of redemption and prior to the close of
business on the second scheduled trading day immediately preceding any
redemption date; or
4. upon the occurrence of specified corporate events.
On or after September 1, 2027 until the close of business on the second
scheduled trading day immediately preceding the maturity date, holders may
convert their Convertible Notes at any time.
If Carnival Corporation undergoes certain corporate events (each, a
"fundamental change"), subject to certain conditions, holders may require
Carnival Corporation to repurchase for cash all or any portion of their
Convertible Notes at a price equal to 100% of the principal amount of the
Convertible Notes to be repurchased, plus accrued and unpaid interest to, but
excluding, the fundamental change repurchase date.
Carnival Corporation may not redeem the Convertible Notes prior to December 5,
2025, except as described in the next sentence. Carnival Corporation may redeem
the Convertible Notes, in whole but not in part, at any time on or prior to
40th scheduled trading day immediately before the maturity date, if Carnival
Corporation or any guarantor would have to pay any additional amounts on the
Convertible Notes due to a change in tax laws, regulations or rulings or a
change in the official application, administration or interpretation of such
laws, regulations or rulings, which in each case is announced and becomes
effective after November 15, 2022. Upon Carnival Corporation's giving notice of
a tax redemption, holders of the Convertible Notes may elect not to have their
Convertible Notes redeemed, in which case such holders would not be entitled to
receive any such additional amounts. The redemption price will equal 100% of
the principal amount of the Convertible Notes being redeemed, plus accrued and
unpaid interest to, but excluding, the redemption date.
In addition, on or after December 5, 2025 and on or before the 40th scheduled
trading day immediately before the maturity date, Carnival Corporation may
redeem for cash all or any portion of the Convertible Notes, at its option, if
the last reported sale price per share of Carnival Corporation's common stock
exceeds 130% of the conversion price then in effect on at least 20 trading days
(whether or not consecutive), including the trading day immediately preceding
the date on which Carnival Corporation provides notice of redemption, during
the 30 consecutive trading day period ending on, and including, the trading day
immediately preceding the date on which Carnival Corporation provides notice of
redemption. The redemption price will equal 100% of the principal amount of the
Convertible Notes being redeemed, plus accrued and unpaid interest to, but
excluding, the redemption date.
The Indenture provides for customary covenants and sets forth certain events of
default after which the Convertible Notes may be declared immediately due and
payable and sets forth certain types of bankruptcy or insolvency events of
default involving Carnival Corporation, Carnival plc, any of our or Carnival
plc's significant subsidiaries or any group of our or Carnival plc's
subsidiaries that, taken together, would constitute a significant subsidiary
after which the Convertible Notes become automatically due and payable.
In connection with the Convertible Notes Offering, on November 15, 2022,
Carnival Corporation, Carnival plc and the subsidiary guarantors party thereto
entered into a purchase agreement (the "Purchase Agreement") with Barclays
Capital Inc., BofA Securities, Inc. and Citigroup Global Markets Inc. The
Purchase Agreement contains customary representations, covenants and
indemnification provisions. The net proceeds from the Convertible Notes
Offering after initial purchasers' discounts and before offering expenses are
$975 million (or approximately $1.121 billion if the initial purchasers
exercise their option to purchase additional Convertible Notes in full). The
Company expects to use the net proceeds from the offering of the Convertible
Notes to make principal payments on debt and for general corporate purposes.
The Convertible Notes were offered only to persons reasonably believed to be
qualified institutional buyers in reliance on Rule 144A under the Securities
Act of 1933, as amended (the "Securities Act"). The Convertible Notes, and the
Common Stock issuable upon conversion of the Convertible Notes, if any, were
not, and will not be, registered under the Securities Act or any state
securities laws and may not be offered or sold in the United States absent
registration or an applicable exemption from the registration requirements of
the Securities Act and applicable state laws.
PJT Partners served as independent financial advisor to Carnival Corporation &
plc.
Carnival Corporation offered and sold the Convertible Notes to the initial
purchasers in reliance on the exemption from registration provided by Section 4
(a)(2) of the Securities Act, and for resale by the initial purchasers to
qualified institutional buyers pursuant to the exemption from registration
provided by Rule 144A under the Securities Act. Carnival Corporation relied on
these exemptions from registration based in part on representations made by the
initial purchasers in the purchase agreement relating to the Convertible Notes
Offering. The shares of Common Stock issuable upon conversion of the
Convertible Notes, if any, have not been registered under the Securities Act
and may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements. Initially, a maximum of
103,046,440 shares of Carnival Corporation's common stock may be issued upon
conversion of the Convertible Notes (assuming the initial purchasers exercise
their option to purchase additional Convertible Notes in full), based on the
initial maximum conversion rate of 89.6056 shares of common stock per $1,000
principal amount of Convertible Notes, which is subject to customary
anti-dilution adjustment provisions.
A copy of the Indenture, included as an Exhibit to Carnival Corporation & plc
joint current report on Form 8-K filed with the U.S. Securities and Exchange
Commission on November 18, 2022, is available on the Carnival Corporation & plc
website at wwww.carnivalcorp.com or www.carnivalplc.com.
About Carnival Corporation & plc
Carnival Corporation & plc is one of the world's largest leisure travel
companies with a portfolio of nine of the world's leading cruise lines. With
operations in North America, Australia, Europe and Asia, its portfolio features
Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises
(Australia), Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (UK) and
Cunard.
Cautionary Note Concerning Factors That May Affect Future Results
Carnival Corporation and Carnival plc and their respective subsidiaries are
referred to collectively in this current report as "Carnival Corporation &
plc," "our," "us" and "we." Some of the statements, estimates or projections
contained in this current report are "forward-looking statements" that involve
risks, uncertainties and assumptions with respect to us, including some
statements concerning the financing transactions described herein, future
results, operations, outlooks, plans, goals, reputation, cash flows, liquidity
and other events which have not yet occurred. These statements are intended to
qualify for the safe harbors from liability provided by Section 27A of the
Securities Act and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical facts are
statements that could be deemed forward-looking. These statements are based on
current expectations, estimates, forecasts and projections about our business
and the industry in which we operate and the beliefs and assumptions of our
management. We have tried, whenever possible, to identify these statements by
using words like "will," "may," "could," "should," "would," "believe,"
"depends," "expect," "goal," "aspiration," "anticipate," "forecast," "project,"
"future," "intend," "plan," "estimate," "target," "indicate," "outlook," and
similar expressions of future intent or the negative of such terms.
Forward-looking statements include those statements that relate to our outlook
and financial position including, but not limited to, statements regarding:
Pricing Goodwill, ship and trademark fair values
Booking levels Liquidity and credit ratings
Occupancy Adjusted earnings per share
Interest, tax and fuel expenses Return to guest cruise operations
Currency exchange rates Impact of the COVID-19 coronavirus global
Estimates of ship depreciable lives pandemic on our financial condition and results
and residual values of operations
Because forward-looking statements involve risks and uncertainties, there are
many factors that could cause our actual results, performance or achievements
to differ materially from those expressed or implied by our forward-looking
statements. This note contains important cautionary statements of the known
factors that we consider could materially affect the accuracy of our
forward-looking statements and adversely affect our business, results of
operations and financial position. Additionally, many of these risks and
uncertainties are currently, and in the future may continue to be, amplified by
COVID-19. It is not possible to predict or identify all such risks. There may
be additional risks that we consider immaterial or which are unknown. These
factors include, but are not limited to, the following:
COVID-19 has had, and is expected to continue to have, a significant impact on
our financial condition and operations. The current, and uncertain future,
impact of COVID-19, including its effect on the ability or desire of people to
travel (including on cruises), is expected to continue to impact our results,
operations, outlooks, plans, goals, reputation, litigation, cash flows,
liquidity, and stock price;
events and conditions around the world, including war and other military
actions, such as the current invasion of Ukraine, inflation, higher fuel
prices, higher interest rates and other general concerns impacting the ability
or desire of people to travel have led and may in the future lead, to a decline
in demand for cruises, impacting our operating costs and profitability;
incidents concerning our ships, guests or the cruise industry have in the past
and may, in the future, impact the satisfaction of our guests and crew and lead
to reputational damage;
changes in and non-compliance with laws and regulations under which we operate,
such as those relating to health, environment, safety and security, data
privacy and protection, anti-corruption, economic sanctions, trade protection
and tax have in the past and may, in the future, lead to litigation,
enforcement actions, fines, penalties and reputational damage;
factors associated with climate change, including evolving and increasing
regulations, increasing global concern about climate change and the shift in
climate conscious consumerism and stakeholder scrutiny, and increasing
frequency and/or severity of adverse weather conditions could adversely affect
our business;
inability to meet or achieve our sustainability related goals, aspirations,
initiatives, and our public statements and disclosures regarding them, may
expose us to risks that may adversely impact our business;
breaches in data security and lapses in data privacy as well as disruptions and
other damages to our principal offices, information technology operations and
system networks and failure to keep pace with developments in technology may
adversely impact our business operations, the satisfaction of our guests and
crew and may lead to reputational damage;
the loss of key employees, our inability to recruit or retain qualified
shoreside and shipboard employees and increased labor costs could have an
adverse effect on our business and results of operations;
increases in fuel prices, changes in the types of fuel consumed and
availability of fuel supply may adversely impact our scheduled itineraries and
costs;
we rely on supply chain vendors who are integral to the operations of our
businesses. These vendors and service providers are also affected by COVID-19
and may be unable to deliver on their commitments which could impact our
business;
fluctuations in foreign currency exchange rates may adversely impact our
financial results;
overcapacity and competition in the cruise and land-based vacation industry may
lead to a decline in our cruise sales, pricing and destination options;
inability to implement our shipbuilding programs and ship repairs, maintenance
and refurbishments may adversely impact our business operations and the
satisfaction of our guests; and
the risk factors included in Carnival Corporation's and Carnival plc's Annual
Report on Form 10-K filed with the SEC on January 27, 2022 and Carnival
Corporation's and Carnival plc's Quarterly Reports on Form 10-Q filed with the
SEC on March 28, 2022, June 29, 2022 and September 30, 2022.
The ordering of the risk factors set forth above is not intended to reflect our
indication of priority or likelihood.
Forward-looking statements should not be relied upon as a prediction of actual
results. Subject to any continuing obligations under applicable law or any
relevant stock exchange rules, we expressly disclaim any obligation to
disseminate, after the date of this report, any updates or revisions to any
such forward-looking statements to reflect any change in expectations or
events, conditions or circumstances on which any such statements are based.
Forward-looking and other statements in this report may also address our
sustainability progress, plans and goals (including climate change and
environmental-related matters). In addition, historical, current and
forward-looking sustainability-related statements may be based on standards for
measuring progress that are still developing, internal controls and processes
that continue to evolve, and assumptions that are subject to change in the
future.
SOURCE Carnival Corporation & plc
Carnival Corporation & plc Media Contacts: Jody Venturoni, Carnival
Corporation, jventuroni@carnival.com, (469) 797-6380; Ellie Beuerman, LDWW,
ellie@ldww.co, (214) 758-7001; Carnival Corporation & plc Investor Relations
Contact: Beth Roberts, Carnival Corporation, eroberts@carnival.com, (305)
406-4832
END
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