| Item 1.01 |
Entry into a Material Definitive Agreement. |
Indenture
On May 25, 2022, Carnival Corporation (the “Corporation”)
closed its previously announced private offering (the “Notes Offering”) of $1.0 billion aggregate principal amount of 10.500%
Senior Unsecured Notes due 2030 (the “Senior Unsecured Notes”). The Senior Unsecured Notes were issued pursuant to an indenture,
dated as of May 25, 2022 (the “Indenture”), among the Corporation, Carnival plc, the subsidiary guarantors party thereto,
and U.S. Bank Trust Company, National Association, as trustee.
The Senior Unsecured Notes will pay interest
semi-annually on June 1 and December 1 of each year, beginning on December 1, 2022, at a rate of 10.500% per year and are callable beginning
June 1, 2025. The Senior Unsecured Notes are unsecured and will mature on June 1, 2030.
The Corporation expects
to use the net proceeds of the offering of the Senior Unsecured Notes to make scheduled principal payments on debt during fiscal 2023
and for general corporate purposes, including, without limitation, making repayments of its indebtedness, the financing or refinancing
of a portion of the purchase price, rental payments, costs and expenses related to certain of its current and future property, plant and
equipment (including leased assets and vessels) and their maintenance, repair, replacement and improvements, as well as any other payments
related to its vessels’ ready-for-sea costs, in each case to the extent such amounts are not covered by the Corporation’s
existing and future export credit facilities.
PJT Partners served as independent financial
advisor to Carnival Corporation & plc.
The Senior Unsecured
Notes are fully and unconditionally guaranteed on an unsecured basis, jointly and severally, by Carnival plc and certain of the Corporation’s
and Carnival plc’s subsidiaries that guarantee substantially all of the Corporation’s indebtedness. In the future, each of
the Corporation’s and Carnival plc’s subsidiaries (other than immaterial subsidiaries) that guarantees certain other indebtedness
of the Corporation, Carnival plc or any other guarantor, including, in each case, indebtedness in an aggregate principal amount in excess
of $300 million, will be required to guarantee the Senior Unsecured Notes.
On or after June 1, 2025, the Corporation may
redeem the Senior Unsecured Notes at its option, in whole at any time or in part from time to time, upon giving not less than 10 nor
more than 60 days’ notice, at the redemption prices set forth in the Indenture. Prior to June 1, 2025, the Corporation may redeem
the Senior Unsecured Notes at its option, in whole at any time or in part from time to time, upon giving not less than 10 nor more than
60 days’ notice, at a redemption price equal to 100% of the principal amount of the Senior Unsecured Notes redeemed, plus a “make-whole”
premium and accrued and unpaid interest. Notwithstanding the foregoing, at any time and from time to time prior to June 1, 2025, the
Corporation may redeem up to 40% of the original aggregate principal amount of the Senior Unsecured Notes (calculated after giving effect
to any issuance of additional notes) using the net cash proceeds of one or more equity offerings at a redemption price equal to 110.500%,
plus accrued and unpaid interest, so long as at least 50% of the original aggregate principal amount of the Senior Unsecured Notes (calculated
after giving effect to any issuance of additional notes) remains outstanding after each such redemption. The Corporation may also redeem
the Senior Unsecured Notes, in whole but not in part, at any time, upon giving not less than 10 nor more than 60 days’ prior written
notice to the holders of the Senior Unsecured Notes, at a redemption price equal to 100% of the principal amount thereof, together with
accrued and unpaid interest, if any, to, but not including, the redemption date, if the Corporation or any guarantor would have to pay
any additional amounts on the Senior Unsecured Notes due to a change in tax laws, regulations or rulings or a change in the official
application, administration or interpretation of such laws, regulations or rulings, which in each case is announced and becomes effective
after May 18, 2022.
The Indenture contains covenants that limit the ability of the Corporation, Carnival plc and their restricted subsidiaries
to, among other things: (i) incur additional indebtedness or issue certain preferred shares; (ii) make dividend payments on or make other
distributions in respect of their capital stock or make other restricted payments; (iii) make certain investments; (iv) sell certain
assets; (v) create liens on assets; (vi) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets; and
(vii) enter into certain transactions with their
affiliates. These covenants are subject to a
number of important limitations and exceptions. Many of the covenants contained in the Indenture will “fall away” permanently
and will no longer apply if, on any date following May 25, 2022, the Senior Unsecured Notes have investment grade ratings from at least
two of Standard & Poor’s Financial Services LLC, Moody’s Investors Service, Inc. and Fitch Ratings, Inc. so long as no
event of default has occurred and is continuing at such time. Additionally, upon the occurrence of specified change of control triggering
events, the Corporation shall offer to repurchase the Senior Unsecured Notes at 101% of the principal amount, plus accrued and unpaid
interest, if any, to, but not including, the purchase date.
The Indenture sets
forth certain events of default after which the Senior Unsecured Notes may be declared immediately due and payable and sets forth certain
types of bankruptcy or insolvency events of default involving the Corporation, Carnival plc, any of the Corporation’s or Carnival
plc’s significant subsidiaries or any group of the Corporation’s or Carnival plc’s subsidiaries that, taken together,
would constitute a significant subsidiary after which the Senior Unsecured Notes become automatically due and payable.
No sinking fund is
provided for the Senior Unsecured Notes.
The Senior Unsecured Notes were offered only
to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended
(the “Securities Act”), and outside the United States, only to non-U.S. investors in reliance on Regulation S under the Securities
Act. The Senior Unsecured Notes were not, and will not be, registered under the Securities Act or any state securities laws and may not
be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities
Act and applicable state laws.
The description of
the Indenture and the Senior Unsecured Notes above is qualified in its entirety by reference to the text of the Indenture and the form
of Senior Unsecured Note attached thereto, which is attached hereto as Exhibit 10.1 and incorporated by reference herein.