(Bloomberg) -- Carnival Corp. is in talks to raise as much as $7 billion as the cruise ship operator seeks to shore up its finances amid a halt on global travel, according to people with knowledge of the matter.
The company, looking to raise cash to improve liquidity as the Covid-19 pandemic upends its business, is being advised by lenders including JPMorgan Chase & Co., said the people, who requested anonymity because the matter is private.
Carnival is discussing issuing a mix of debt and equity, the people said. Options include issuing $3 billion to $7 billion in senior secured first-lien debt, implying a loan-to-value ratio of about 25%, they said. The company is also weighing issuing $1.5 billion in convertible notes and $1 billion to $2 billion in common equity, one of the people said. The situation remains fluid, they said.
Representatives for Carnival and JPMorgan declined to comment.
Carnival fell as much as 21% on Friday after a late change to the U.S. stimulus package limited relief for companies not incorporated in the U.S. The largest cruise industry player, Carnival is incorporated in Panama but operates out of Miami.
The stock has fallen 71% this year and was trading at $14.66 at 2:41 p.m. in New York, giving it a market value of about $9.6 billion.
Carnival said this month it was looking for additional financing after providing notice to borrow about $3 billion under an existing credit facility. It also said it expects to post a loss this fiscal year.
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