New Issue: Carnival $400 mln (proceeds) convertibles yield 3.75%, up 35%

By Ronda Fears

Nashville, Tenn., Oct. 19 - Carnival Corp. sold $400 million in proceeds of 20-year zero-coupon convertible notes at 47.566 for a yield-to-maturity of 3.75% and a 35% initial conversion premium. Merrill Lynch was lead manager of the Rule 144A deal.

Miami, Fla.-based Carnival said it would use proceeds to repay $160 million of bank debt maturing in November and toward the $300 million final payment of Carnival Cruise Lines' new cruise ship, Carnival Pride, which is scheduled to be delivered in December. Any remaining proceeds will be used for general corporate purposes. In April, Carnival sold $500 million of 2% convertibles (A2/A) with a 40% initial conversion premium.

Terms of the new deal are:

Issuer: Carnival Corp

Amount: $400 million (proceeds)

Greenshoe: $100 million (proceeds)

Lead Manager: Merrill Lynch

Maturity Date: Oct. 24, 2021

Coupon: 0%

Issue Price: 47.566

Yield-to-maturity: 3.75%

Conversion Premium: 35%

Conversion Price: $28.66

Conversion Ratio: 16.5964

Call: non-callable for seen years

Put: in years five, seven, 10 and 15

Contingent Conversion: 110% threshold

Settlement Date: Oct. 24

End

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