(Bloomberg) -- Carnival Corp. is taking another stab at replacing expensive bonds sold at the onset of the pandemic with a new $1.5 billion loan.
The cruise ship operator is looking to syndicate a secured loan maturing in 2028 to replace a chunk of the 11.5% notes that it issued in April 2020 to boost liquidity while Covid-19 halted travel, according to people with knowledge of the matter.
Carnival has started marketing the loan to potential investors at a spread of 3.25 percentage points over the London interbank offered rate and scheduled a Monday call with lenders for 11 a.m. New York time, said the people, who asked not to be named because the details are private.
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While the offering may not fully extinguish the 11.5% notes, the refinancing could save Carnival more than $100 million in annual interest expense, Bloomberg Intelligence said in a note on Monday.
In July, the company sold $2.4 billion of junk bonds with a coupon of 4% to buy back some of the 11.5% notes, on which the company originally had $4 billion outstanding. Carnival only used about $2 billion of proceeds from the July sale to extinguish the pandemic debt, so there's $2 billion left outstanding.
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