Carnival Sells $2.4 Billion Bond to Buy Back Costly Debt
- Notes priced with a coupon of 4%, the low range of discussions
- Deal will slash interest costs through buying back 11.5% notes
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Carnival Corp. sold $2.4 billion of new junk bonds Wednesday to refinance debt the cruise ship company took on last year, when it was forced to pay high interest rates amid doubts about its ability to weather the pandemic.
The company sold the seven-year secured notes with a coupon of 4%, in the low range of pricing discussions, and reflects the strong demand for high-yield bonds as investors hunt for bigger returns. That will slash 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.