Carnival to raise $1bn to buy back notes

The cruise operator said Carnival Corp would offer 57,426,860 shares priced at $18.05 a share to a limited number of holders of its 5.75% convertible senior notes due 2023. The FTSE 250 company said it would use the proceeds to buy back notes with total face values of $499,364,000 in privately negotiated transactions.

Carnival said it would not receive any proceeds from the transaction and would pay the normal fees and expenses. Goldman Sachs is acting as the placement agent for the offering.

"The transactions will not have a material impact on the corporation's cash position," Carnival said. The offer is expected to close on 19 November and note repurchases will end promptly following the transaction. Carnival said 8.2m of shares would close on 20 November.

Carnival's business has been hammered by the Covid-19 pandemic, which has cast doubt on the long-term future of the cruise industry. The company agreed to pay bond investors 11.5|% a year to borrow $4bn in a rescue fundraising in April.