Carnival Cruise Line Pays High Price to Get Credit Investors On Board

Carnival Corp the world’s largest cruise operator, said it has raised $6.25 billion by issuing new debt and equity on Wednesday, borrowing at a high cost to weather the economic storm of the coronavirus pandemic.

Despite having its cruise ships idled to comply with coronavirus travel restrictions, the company was able to attract enough investors that its capital raising was oversubscribed several times over, albeit at a steep price, sources told Reuters. 

Carnival priced $4 billion in bonds maturing in 2023 – upsized from the $3 billion originally planned – with a yield at par value of 11.5%, it said in a statement. 

By comparison, Carnival paid a 1% yield in October, when it borrowed 600 million euros ($657.7 million) in the European debt market. Moreover, Carnival had to use its ships as collateral to attract bond investors on Wednesday.

Read the source article at reuters.com

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