Carnival Corp. is looking to slash borrowing costs with the sale of new junk bonds that would refinance debt that the cruise operator sold at the height of the pandemic at almost triple the cost, Bloomberg News reported. The new offering may be sold as soon as next week, and early pricing discussions are in the 4%-4.125% range. The proceeds will finance a tender offer, launched last week, to buy back as much as half of Carnival’s $4 billion three-year secured notes with a whopping 11.5% coupon. Carnival issued those notes in April of last year to raise cash as cruise travel halted around the globe. If the company were to buy back $2 billion of that debt at a rate of 4%, it would save $150 million per year in interest costs, according to Bloomberg calculations.
