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Carnival launches upsized $4 billion three-year notes with 11˝% coupon at 99, drops euro tranche
By Paul A. Harris
Portland, Ore., April 1 – Carnival Corp. launched an upsized $4 billion amount of three-year first-priority senior secured notes (Baa2/BBB-) with an 11˝% coupon at 99 on Wednesday, according to market sources.
The deal was expected to price on Wednesday; however, no final terms were available at press time.
The coupon launched 12.5 basis points inside of coupon talk in the 12% area, and 100 bps beneath the initial coupon talk of 12˝%. The deal, which was upsized from $3 billion, launched on top of final price talk and at the rich end of initial price guidance of 98 to 99.
A proposed €300 million minimum tranche was withdrawn.
The upsize, from $3 billion, had been expected as the deal was heard to be as much as four-times oversubscribed, market sources said.
Joint bookrunner J.P. Morgan Securities LLC will bill and deliver in the Miami-based leisure travel company’s secured notes offering. Goldman Sachs & Co. LLC and BofA Securities Inc. are also joint bookrunners.
The Rule 144A and Regulation S for life notes come with a bullet structure in which the notes are callable three months prior to maturity at par but are otherwise non-callable.
The notes will be secured by a first-priority lien on the collateral, which includes capital stock of certain subsidiaries, mortgages on a substantial majority of the company’s vessels and related vessel collateral, material intellectual property and pledges over other vessel-related assets including inventory, computer software and casino equipment, according to a company press release.
Proceeds will be used for general corporate purposes.
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