Carnival Corporation: Update to credit analysis following outlook change to positive - Moody's Global Credit Research

Carnival Corporation: Update to credit analysis following outlook change to positive

Carnival Corporation: Update to credit analysis following outlook change to positive - Moody's Global Credit Research
Carnival Corporation: Update to credit analysis following outlook change to positive
Published Mar 07, 2024
9 pages (5086 words) — Published Mar 07, 2024
Price US$ 250.00  |  Buy this Report Now

About This Report

  
Brief Excerpt:

...Carnival Corporation is the largest worldwide cruise line based on revenue, fleet size and number of passengers boarded. The company operates the largest number and most diverse cruise line brands, addressing all segments of the ocean cruise market. Carnival will continue to benefit from the value proposition of a cruise vacation relative to land-based destinations and a group of loyal cruise customers that support a recurring base level of demand. Carnival also benefits from its good liquidity including cash of about $2.4 billion and $3 billion of availability under its revolving credit facility. Carnival's ratings are constrained by the need for continued growth in pricing and bookings in order to generate sufficient free cash flow to de- leverage the capital structure. We forecast debt/EBITDA will decline to below 5x with FFO + interest/interest coverage improving to almost 3x over the next 12 to 18 months. Demand is seasonal and capital intensity is also significant. Other risks include...

  
Report Type:

Credit Opinion

Company:
Issuer
Carnival Corporation
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Carnival Corporation: Covenant Quality Post-Sale Snapshot: ¬500m 5.75% Senior Unsecured Notes due 2030 - Covenant Quality Assessment – 2024/05/01 – US$ 750.00 – ...+ Liens subordination. Initial subordinating debt of $5.8bn = 1.2x adj. EBITDA + Structural subordination. Both the 2028 Senior Priority Notes and the New RCF structurally subordinate the Notes and are supported by vessels + CoC. Only one of five standard triggering events, and such event is subject to a rating condition + Absent HY covenants. The following covenants are absent: (i) restricted payments and investments; (ii) asset sales (beyond merger and sale of all or substantially all assets); (iii) debt incurrence; (iv) affiliate transactions...

Carnival Corporation - February 2024 (LTM): Peer Snapshot - Peer Snapshot – 2024/04/26 – US$ 750.00 – ...Carnival Corporation Hilton Worldwide Holdings Inc. NCL Corporation Ltd. Royal Caribbean Cruises Ltd....

Moody's affirms Carnival Corporation's B2 corporate family rating, changes outlook to positive - Rating Action – 2024/03/01 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT...

Carnival Corporation - November 2023 (LTM): Peer Snapshot - Peer Snapshot – 2024/02/22 – US$ 750.00 – ...Carnival Corporation Hilton Worldwide Holdings Inc. NCL Corporation Ltd. Royal Caribbean Cruises Ltd....

Carnival Corporation - August 2023 (LTM): Peer Snapshot - Peer Snapshot – 2023/10/27 – US$ 750.00 – ...Carnival Corporation Hilton Worldwide Holdings Inc. NCL Corporation Ltd. Royal Caribbean Cruises Ltd....

Carnival Corporation: Covenant Quality Post-Sale Snapshot: $500m 7.00% First-Priority Senior Secured Notes due 2029 - Covenant Quality Assessment – 2023/08/18 – US$ 750.00 – ...+ Liens subordination: (i) provides for all liens to fall-away tied to a ratings upgrade; (ii) to keep equal and ratable clause in certain unsecured debt documents from triggering, a Collateral savings clause could spring, resulting in a reduction in Collateral securing the Notes + Structural subordination. Both the 2028 Senior Priority Notes and the New RCF structurally subordinate the Notes and are supported by vessels + CoC: (i) only one of five standard triggering events, and such event is subject to a rating condition + HY covenant termination: HY covenants, including the future guarantee requirement, terminate if the Notes are IG-rated by at least two rating agencies and no default...

Carnival Corporation - May 2023 (LTM): Peer Snapshot - Peer Snapshot – 2023/08/04 – US$ 750.00 – ...Carnival Corporation Hilton Worldwide Holdings Inc. NCL Corporation Ltd. Royal Caribbean Cruises Ltd....

More from Moody's Global Credit Research

Moody's Global Credit Research—Moody's Investors Service, a leading global credit rating, research and risk analysis firm, publishes credit opinions, research, and ratings on fixed-income securities, issuers of securities and other credit obligations. Credit ratings and research help investors analyze the credit risks associated with fixed-income securities. Ratings also create efficiencies in fixed-income markets and similar obligations, such as insurance and derivatives, by providing reliable, credible, and independent assessments of credit risk. For issuers, Moody's services increase market liquidity and may reduce transaction costs.

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Cite this Report

  
MLA:
Moody's Global Credit Research. "Carnival Corporation: Update to credit analysis following outlook change to positive" Mar 07, 2024. Alacra Store. May 25, 2024. <http://www.alacrastore.com/moodys-credit-research/Carnival-Corporation-Update-to-credit-analysis-following-outlook-change-to-positive-PBC_1396209>
  
APA:
Moody's Global Credit Research. (). Carnival Corporation: Update to credit analysis following outlook change to positive Mar 07, 2024. New York, NY: Alacra Store. Retrieved May 25, 2024 from <http://www.alacrastore.com/moodys-credit-research/Carnival-Corporation-Update-to-credit-analysis-following-outlook-change-to-positive-PBC_1396209>
  
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