Carnival Corp.'s Proposed $1 Billion Term Loan B Due 2027 Rated 'BB-' (Recovery Rating: '1')

NEW YORK (S&P Global Ratings) July 31, 2023--S&P Global Ratings today assigned its 'BB-' issue-level rating and '1' recovery rating to Carnival Corp.'s proposed $1 billion term loan B (TLB) due 2027. The '1' recovery rating indicates our expectation for very high (90%-100%; rounded estimate: 95%) recovery for lenders in the event of a default. The company plans to use the proceeds from this TLB to repay a portion of its $1.8 billion term loan due 2025. Management has indicated that it also may raise $500 million of other secured debt maturing in 2029. We expect to assign our 'BB-' issue-level rating and '1' recovery rating to this proposed debt when it is launched. The company also plans to use

...(90%-100%), we cap our recovery ratings on the unsecured debt issued by companies we rate in the 'B' category at '2'. This cap reflects that their recovery prospects are at greater risk of being impaired by the issuance of additional priority or pari passu debt prior to default. - Our issue-level rating on Carnival's unsecured debt with subsidiary guarantees is 'B'. The '4' recovery rating indicates our expectation for average (30%-50%; rounded estimate 45%) recovery for lenders in the event of a default. - Our issue-level rating on Carnival's unsecured debt without subsidiary guarantees is 'B-'. The '5' recovery rating indicates our expectation for modest (10%-30%; rounded estimate 25%) recovery for lenders in the event of a default. Simulated default assumptions - Our simulated default scenario contemplates a default occurring by 2026 due to a significant decline in the company's cash flow from permanently impaired demand for cruises following the negative publicity and travel advisories...

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