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:
- 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;
- 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;
- 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
- 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
Estimates of ship depreciable lives and residual values |
Impact of the COVID-19 coronavirus
global pandemic on our financial condition and results 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