(Bloomberg) – Carnival Corp. is selling $ 2.4 billion in new junk bonds to refinance debt the cruise company took on last year, when it was forced to pay high interest rates amid doubts about its ability to weather. the pandemic.
New debt pricing discussions are in the range of 4% to -4.25% and reflect strong demand for high yield bonds as investors seek higher yields. That would cut borrowing costs for Carnival because the proceeds will fund an offer to buy back about half of the 11.5% coupon debt the company issued in April 2020.
Read more: It is said that Carnival will prepare the sale of bonds to buy back debt
An investor call was made early Wednesday and the seven-year guaranteed notes are expected to be priced later in the day, according to people familiar with the matter who asked not to be identified when discussing a private transaction.
Carnival shares rose more than 9% Wednesday to $ 23.25 as of 1:40 pm in New York. Existing 11.5% notes last traded at 113.875 cents on the dollar last Thursday, according to Trace bond price data.
Holders of about $ 2.4 billion of the $ 4 billion of 11.5% notes accepted the public offering before the anticipated July 19 deadline, after the company offered to buy back up to $ 2 billion of the securities. the company said in a statement on July 19. Monday.
Investors who accepted the anticipated deadline and agreed to a contract change for the existing notes will receive 114.25 cents on the dollar. Headlines who say yes before the August 2 deadline will receive 112.5 cents.
(Update the second paragraph with the official price talk and the fourth paragraph with the stock price.)
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