Carnival Corp.'s First-Lien Term Loan Rated 'BB-' (Recovery Rating: '1')

SAN FRANCISCO (S&P Global Ratings) Oct. 4, 2021--S&P Global Ratings today assigned its 'BB-' issue-level rating to U.S.-based cruise operator Carnival Corp.'s proposed $1.5 billion term loan B. The recovery rating is '1', indicating our expectation for very high (90%-100%; rounded estimate 95%) recovery for lenders in the event of a default. Carnival plans to use proceeds from the loan to redeem amounts under its existing 11.5% first-priority senior secured notes due 2023 ($2 billion outstanding), and to pay premiums, accrued interest, and fees and expenses. Since the transaction is largely debt for debt, it does not affect our 'B' issuer credit rating or negative outlook on Carnival. We expect the transaction will reduce Carnival's interest burden because we expect

...October 4, 2021 SAN FRANCISCO (S&P Global Ratings) Oct. 4, 2021--S&P Global Ratings today assigned its '##-' issue-level rating to U.S.-based cruise operator Carnival Corp.'s proposed $1.5 billion term loan B. The recovery rating is '1', indicating our expectation for very high (90%-100%; rounded estimate 95%) recovery for lenders in the event of a default. Carnival plans to use proceeds from the loan to redeem amounts under its existing 11.5% first-priority senior secured notes due 2023 ($2 billion outstanding), and to pay premiums, accrued interest, and fees and expenses. Since the transaction is largely debt for debt, it does not affect our 'B' issuer credit rating or negative outlook on Carnival. We expect the transaction will reduce Carnival's interest burden because we expect the margin on the term loan B will be about the same as the margin on Carnival's existing term loan B, which is 3.75%- significantly lower than the 11.5% rate on the secured notes the company is redeeming. The...

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