Carnival remains wrapped around par with earnings; Aspen Dental finalized, frees to trade

By Sara Rosenberg

New York, Dec. 21 – Carnival Corp.’s term loan B held steady in the secondary market on Thursday after the company came out with fourth quarter and full-year results that outperformed prior expectations.

In more happenings, Aspen Dental finalized the spread on its term loan at the low end of talk and made a number of revisions to documentation, and then the debt broke for trading during the session.

Carnival steady

Carnival’s term loan B was quoted at 99 7/8 bid, par 5/8 offered on Thursday, in line with Wednesday’s levels, following the release of positive fourth quarter and full-year numbers, according to a market source.

For the quarter, the company reported a net loss of $48 million, or a loss of $0.04 per diluted share, and adjusted net loss of $90 million, or a loss of $0.07 per diluted share, which was above the better end of the September guidance range. In the fourth quarter of 2022, the company reported a net loss of $1.598 billion, or a loss of $1.27 per diluted share, and adjusted net loss of $1.068 billion, or a loss of $0.85 per diluted share.

Adjusted EBITDA for the quarter was $946 million, compared to a loss of $96 million in the prior year and above previous guidance in the range of $800 million to $900 million.

Revenues for the quarter were $5.397 billion, versus $3.839 billion in the 2022 fourth quarter.

For the full year, the company had revenues of $21.593 billion, compared to $12.168 billion in the previous year, net loss of $74 million, or $0.06 per diluted share, versus net loss of $6.093 billion, or $5.16 per diluted share, and adjusted EBITDA of $4.231 billion, versus negative $1.684 billion in 2022.

Carnival evaluating options

Carnival also revealed in its earnings announcement that it has made progress on paying down its debt and will continue to assess potential refinancing opportunities and further prepayments.

“During 2023, we made debt payments of $6 billion and ended the year with just over $30 billion of debt, which is $3 billion better than we forecasted just nine months ago during our March conference call and almost $5 billion off the first quarter peak,” said David Bernstein, chief financial officer in a news release.

“And looking forward, we will continue to evaluate refinancing opportunities and opportunistically prepay additional debt. Furthermore, we expect durable revenue growth to drive increases in adjusted free cash flow in 2024 and beyond, which will be the primary driver for paying down our debt balances on our path back to investment grade,” Bernstein added.

Carnival is a Miami-based cruise operator.

Aspen updated, breaks

Aspen Dental firmed pricing on its $780 million term loan (B3/B-) due December 2027 at SOFR plus 575 basis points, the low end of the SOFR plus 575 bps to 600 bps talk, and made changed to documentation, including to, among other things, MFN, restricted payments, and investments, a market source remarked.

The term loan still has a 0% floor and an original issue discount of 95.

Call protection on the term loan is non-callable for one year, then a 101 hard call for six months, the source continued.

On Thursday, the term loan freed to trade, with levels quoted at 97½ bid, another source added.

JPMorgan Chase Bank, RBC Capital Markets, Deutsche Bank Securities Inc., BMO Capital Markets, UBS Investment Bank and KKR Capital Markets are leading the deal that will be used with sponsor equity to refinance/amend and extend an existing $873 million term loan B-1 due April 2025.

Aspen Dental is an operator of a group of branded dental offices.

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