S&P assigns Carnival notes BB-

S&P said it assigned BB- and 1 recovery ratings to Carnival Corp.'s planned $500 million of first-priority secured notes due in 2029. The 1 recovery rating indicates very high (90%-100%; rounded estimate: 95%) recovery in default.

Carnival plans to use the proceeds along with a previously announced $1 billion term loan, also rated BB- with a 1 recovery rating, to repay a portion of its $1.8 billion term loan due in 2025. The company also plans to use balance sheet cash to redeem $1.2 billion of second-lien notes due in 2026.

“Despite the expected $1.2 billion of debt reduction, the proposed transaction does not materially affect our forecast credit measures because we net Carnival's excess cash that we believe is available for debt repayment. However, the planned refinancing and debt repayment will extend its maturities and reduce its cash interest expense,” the agency said in a press release.

The outlook is positive.

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