Carnival amends, replaces multi-currency revolving credit agreement

By Tali Rackner

Norfolk, Va., June 17 – Carnival Corp. and Carnival plc entered into a $1.7 billion, €500 million and £150 million multi-currency revolving credit agreement on Monday, according to an 8-K filing with the Securities and Exchange Commission.

The agreement amends and replaces the previously existing $1.6 billion, €450 million and £150 million multi-currency revolving credit agreement, dated May 18, 2011, which was set to expire May 18, 2016.

Borrowings bear interest at Libor plus a margin currently at 40 basis points. Carnival Corp. is required to pay a commitment fee of 35% of the margin per annum, which is currently 0.14%, on the unused portion.

There is an additional use fee of: (a) 0.1% per annum of the outstanding amounts if they equal or are less than 33 1/3% of the total commitments under the facility; (b) 0.2% per annum of the outstanding amounts if they are more than 33 1⁄3% but equal or are less than 66 2⁄3% of the total commitments under the facility; and (c) 0.4% per annum of the outstanding amounts if they exceed 66 2⁄3% of the total commitments.

The facility agreement expires on June 16, 2019, unless extended for a maximum of two years.

Under the agreement, Carnival must ensure that, at the end of each fiscal quarter, Carnival Corp. and Carnival plc’s consolidated issued capital and consolidated reserves are in excess of $5 billion, the total of all borrowings does not exceed 65% of consolidated capital and the ratio of EBITDA to consolidated net interest charges is not less than 3 to 1.

According to the filing, the agreement does not contain any credit ratings-based defaults or covenants or any covenants or representations relating to a material adverse change in the companies’ consolidated financial condition or results of operations.

Borrowings may be used for general corporate purposes. Unused credit is available to support commercial paper borrowings, and a portion of the commitments, not to exceed $300 million at any time, may be used for the issuance of bonds, letters of credit and other indemnities.

BofA Merrill Lynch International Ltd. is the agent and joint lead arranger. Barclays Bank plc, BNP Paribas, Citigroup Global Markets Ltd., Goldman Sachs Bank USA, Intesa Sanpaolo SpA, J.P. Morgan Ltd., Lloyds Bank plc, Mizuho Bank, Ltd. and Royal Bank of Scotland plc are also lead arrangers.

Carnival Corp. is a Miami-based unit of London-based cruise operator Carnival plc.

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