REG-Carnival PLC: Carnival Corp Announces Closing of Convertible Notes

CarnivalAnnouncement

21/11/2022 07:15

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 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



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