CCL Carnival Corp

On August 22, 2022, Carnival Corporation (together with Carnival plc, the “Company,” “we,” “us,” or “our”) closed its previously announced exchange of approximately $339 million in aggregate principal amount of Carnival Corporation’s outstanding 5.75% Convertible Senior Notes due 2023 (the “Existing Notes”) for $339 million in aggregate principal amount of Carnival Corporation’s new 5.75% Convertible Senior Notes due 2024 (the “New Notes” and such exchange, the “Exchange”). The New Notes have the same initial conversion price as the Existing Notes, representing no dilution to shareholders at scheduled maturity versus the Existing Notes, the same coupon and no upfront cost to the Company.

The New Notes were issued pursuant to an Indenture, dated as of August 22, 2022 (the “Indenture”), among Carnival Corporation, Carnival plc, the subsidiary guarantors party thereto and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The New Notes will pay interest semi-annually on April 1 and October 1 of each year, beginning on October 1, 2022, and interest on the New Notes will accrue from April 1, 2022. The New Notes are senior unsecured obligations of Carnival Corporation and will mature on October 1, 2024, unless earlier converted, redeemed or repurchased. No sinking fund is provided for the New Notes.

The New Notes are fully and unconditionally guaranteed on a senior unsecured basis by Carnival plc and certain of Carnival Corporation’s and Carnival plc’s subsidiaries that guarantee substantially all of Carnival Corporation’s indebtedness (the “Subsidiary Guarantors”). In the future, each of Carnival Corporation’s or Carnival plc’s subsidiaries (other than the Subsidiary Guarantors) that becomes an issuer, borrower, obligor or guarantor under certain other indebtedness for borrowed money of Carnival Corporation, Carnival plc or any other Subsidiary Guarantor, in each case, in an aggregate principal amount in excess of $250 million, will guarantee the New Notes; provided, that any such subsidiary will not be required to become a guarantor if such subsidiary would not be required to provide a guarantee under certain of Carnival Corporation’s, Carnival plc’s, or any Subsidiary Guarantor’s capital markets indebtedness (excluding the Existing Notes).

The New Notes are convertible by holders, subject to the conditions described below, into cash, shares of the common stock, par value $0.01 per share, of Carnival Corporation (the “Common Stock”), or a combination thereof, at Carnival Corporation’s election. The initial conversion rate of the New Notes is 100.0000 shares of Common Stock per $1,000 principal amount of New Notes, equivalent to an initial conversion price of approximately $10.00 per share of Common Stock. The conversion rate is subject to customary anti-dilution adjustments but will not be adjusted for any accrued and unpaid interest. In addition, holders who elect to convert their New Notes in connection with certain corporate events or a notice of a tax redemption are, under certain circumstances, entitled to convert at an increased conversion rate.

The New Notes are convertible at any time until August 31, 2022. After August 31, 2022, the New Notes are convertible at any time prior to the close of business on the business day immediately preceding July 1, 2024 only under the following circumstances:

On or after July 1, 2024 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert their New Notes at any time.

If Carnival Corporation undergoes certain corporate events (each, a “fundamental change”), subject to certain conditions, holders may require Carnival Corporation to repurchase for cash all or any portion of their New Notes at a price equal to 100% of the principal amount of the New Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

Carnival Corporation may not redeem the New Notes after June 30, 2024. Carnival Corporation may redeem the New Notes, in whole but not in part, at any time on or prior to June 30, 2024, upon giving not less than 45 nor more than 65 scheduled trading days’ prior written notice to the holders of the New Notes, at a redemption price equal to 100% of the principal amount thereof, together with accrued and unpaid interest, if any, to, but not including, the redemption date, if Carnival Corporation or any guarantor would have to pay any additional amounts on the New Notes due to a change in tax laws, regulations or rulings or a change in the official application, administration or interpretation of such laws, regulations or rulings, which in each case is announced and becomes effective after April 1, 2020. Upon Carnival Corporation’s giving notice of a tax redemption, holders of the New Notes may elect not to have their New Notes redeemed, in which case such holders would not be entitled to receive any such additional amounts.

The Indenture provides for customary covenants and sets forth certain events of default after which the New Notes may be declared immediately due and payable and sets forth certain types of bankruptcy or insolvency events of default involving Carnival Corporation, Carnival plc, any of our significant subsidiaries or any group of our subsidiaries that, taken together, would constitute a significant subsidiary after which the New Notes become automatically due and payable.

PJT Partners served as independent financial advisor to Carnival Corporation & plc.

The foregoing descriptions of the New Notes and the Indenture do not purport to be complete and are qualified in their entirety by reference to the Indenture (which includes the form of the New Note). A copy of the Indenture (which includes the form of the New Note) is filed as Exhibit 4.1 to this Current Report on Form 8-K and incorporated by reference in Items 1.01, 2.03 and 3.02.

The Issuer and Carnival plc offered the New Notes to certain holders of the Existing Notes in reliance on the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended (the “Securities Act”). The shares of Common Stock issuable upon conversion of the New Notes are expected to be issued in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act. The offer and sale of the New Notes to certain holders of the Existing Notes did not involve a public offering, the solicitation of offers for the New Notes was not done by any form of general solicitation or general advertising, and offers for the New Notes were only solicited from persons believed to be “qualified institutional buyers” within the meaning of Rule 144A promulgated under the Securities Act. The New Notes and any Common Stock that may be issued upon conversion of the New Notes will not be registered under the Securities Act, and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from registration requirements.

This Current Report on Form 8-K does not constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful.