Carnival Corp.

We believe stagnant economic growth in European countries like Germany and Italy, where Carnival derives most of its guests for its AIDA and Costa brands, respectively, are reflected in these booking trends. Additionally, we believe Brexit may contribute to volatility in bookings and pricing for Carnival's U.K. brands. We believe that any modest pullback in U.S. consumer discretionary spending would drive lower net revenue yields in 2020 since North American customers represents just over 50% of Carnival's customer base. We believe lower net revenue yields from the North America segment would result in lower EBITDA growth than we are currently forecasting and translate to an EBITDA level that is not sufficient to offset rising debt levels to fund ship deliveriesas

...We believe adjusted leverage will remain around 2.4x to 2.5x through 2020. Our base case forecast for 2020 is for operating-lease and port-commitment adjusted leverage to remain at about 2.4x to 2.5x. This is largely because our forecast for EBITDA growth (around 6% to 8%) is not sufficient to offset our expectation that debt will increase by about $1 billion from incremental debt associated with the delivery of four ships and other capital expenditures (capex), in addition to other large cash uses like dividends and required amortization under Carnival Corp.'s loans. Our forecast for EBITDA growth in 2020 is driven by increased capacity (7%), and would otherwise be higher but for our assumption for constant currency net revenue yields to be about flat. This expectation reflects advanced bookings for the first half of 2020, which are currently higher than the first half of 2019, reflecting higher occupancy and flat pricing for the North America segment and flat occupancy and pricing for...

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