Just happened to catch it on BLOOMBERG....details sketchy but they want to float (excuse the pun) ANOTHER 600m in "unsecured" junk bonds. its the 5th time they're doing it, and not sure who would have the "appetite" for such an offering. Some of this is above my paygrade. but i just don't see how they're going to survive this. If they do, an inside cabin would require a second mortgage...

28 Answers

My knowledge of financial intrigue for the cruise industry could fit on the head of a pin. Don’t know if this is good or bad. As always, we will have to wait and see!Surprised

No "financial intrigue" involved...they're continuing to try to borrow $$ to pay for ongoing day to day operations and obligations they can't stop or default on. Looks like they're planning for an even bigger delay in resuming cruising. The more they borrow, the more it costs...and...they have nothing left to mortgage, or use as security...the sector that caters to this type of activity for joe schmo are called loan sharks...there's a different sexier name on the commercial side...Deadbeats have to pay more for credit, due to the increased risk of that can, issue more almost worthless paper, called "junk bonds."

It would be the equivalent of facing the rent/mortgage/food payments with nothing left on your credit cards...which you've been using to survive day to day...theres NOTHING good about it....some folks out there actually can smell the blood in the water...

Sure we'll wait and see...what else is there to do? I can substitute other activities for cruising, but nothing will satisfy, or even come close...sad situation....

That's the absolute truth of the matter! Sadly for us, our other favorite outlet is mostly non-existent. There are a few Renaissance Festivals happening at reduced capacity, required masks, eating and drinking in designated areas only and social distancing. Hmmm...sounds familiar.

Thanks for the explanation. I appreciate your insight.

AUNTIE...I wish i was 100% wrong.......AND just got a notification from NCL extending those FCCs "cruise by" dates from 12/31/21 to 12/31/22...Wish they had done it sooner, would have simplified the nonsense from a few months ago. Seems to me they're on the verge of cancelling 2021 completely, ...but I admit I can't do tea leaves...OGW...did you get the thing? whats your take???

That's serious, and curious.

It's serious because the last time they raised cash they did not get very favorable terms. Anything else going forward is going to be "predatory" on the part of the lenders.

It's curious because the last article I read stated they (Carnival) is burning through over $500m of cash per month. So are they saying they need to only float an additional 5 weeks of solvency? The article also stated they had enough cash on hand ($9B+) to last through 2021, but I suspected that was just bravado on the part of CEO Arnold Donald. I think the $600M number is as much as they have been told they can get this time around, and better to get it now than try in a few months after the window has closed.

The good news is the market hasn't punished them on that announcement (yet). The stock was only down 2.5% today. We'll see where it opens tomorrow.

I'm thinking Yankee47 is right. The sharks may be starting to swim towards CCL, and probably the others. They aren't circling yet, but that announcement (if accurate) will certainly get their attention. And the whole 2021 cruise season may be circling the drain. The bright spot (if it can be believed) is that bookings are strong for 2022 & 23. It's just a drop in the bucket as far as revenue is concerned, but at least it give them something to show the investors.

Couldn't find anything on the web regarding this Yank. Was it an actual announcement, or could they just have been trying to float a trial balloon?

Can't say this news is surprising. I also agree that 2021 cruising is going to be a wash. Best case scenario imho is limited cruising for 2022. Hope I am wrong.


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