Carnival cut to junk rating at S&P

[coevan]

unfortunately booking do not equal departures

[tallyho8]

On 6/23/2020 at 9:11 PM, chipmaster said:

 

why do people play with loser hoping to catch a dead cat bounce, when you can buy Apple, Microsoft, and ones where macro-economics and fundamentals all all tailwinds?  

I don't think there are too man "rich" people on CCL or RCL, but lots of them for those other companies, LOL

 

On 6/23/2020 at 9:11 PM, chipmaster said:

Your grafts show that if you bought Carnival when it hit bottom this year the price has increased over 100% since then.

If you bought Microsoft at the bottom it hit this year, it has only increased 51%.

Seems to me it was smarter to invest in Carnival at it's bottom this year.

 

 

[TNcruising02]

I'm not sure why other people buy Carnival, but I bought my first 100 shares in March to get the OBCs and because the stock seemed like a good deal.  When I saw how low it was dipping, I knew it would be an inexpensive way to make money if I bought more shares as it dipped.  I bought Carnival, Royal, and several airline stocks. When they all dipped very low, it was pretty much a no brainer to me.  Although Apple, Fed Ex and other stocks are very good stocks, it takes a larger investment.  A thousand shares of Carnival at $8.00 a share could have been sold at $16.00 for an $8,000 profit, or held for the long haul.  Same with the airline stocks.  American was inexpensive when it was under $10.  United dipped below $20.  Royal to the very low 20s.  It is a good opportunity.  Even buying when it dips very low and selling a month later is some easy money.  

Some people see bankruptcy and others see opportunity. 
 

Edited June 25, 2020 by TNcruising02

[Illbcruzn4life]

15 hours ago, evandbob said:

 

Since Carnival caters to 1st time cruisers, I doubt that there will be enough of them willing to take a chance with their precious health and vacation time by booking a cruise.  Since cruising is totally voluntary, the industry will suffer getting back on its feet.  There aren't enough cruising fanatics to sustain a long recovery.

 

When cruising does start again, I think many countries will refuse to port ships leaving from American ports.  We are leading the world in COVID cases and not welcome in many countries.

 

Perhaps Carnival will dominate the industry, but maybe with only 6 ships.

 

another couple we cruise with said they don't know if they'll ever get on another cruise ship.

 

We were booked with them for December but we all canceled last month. We had refundable deposits so hopefully we will get them back by Christmas.

[ontheweb]

5 hours ago, Illbcruzn4life said:

 

another couple we cruise with said they don't know if they'll ever get on another cruise ship.

 

We were booked with them for December but we all canceled last month. We had refundable deposits so hopefully we will get them back by Christmas.

We're still waiting for a refundable deposit (from Princess) from early April for a cruise we cancelled before Princess (after hoping to get people to make final payments) cancelled a month later.

 

Good luck getting your money back in any reasonable time.

[travelhound]

21 hours ago, evandbob said:

 

Since Carnival caters to 1st time cruisers, 

This is exactly why Carnival is in a better position.  Most of the initial guests will be college kids, young families and the young at heart.  The upscale lines cater to older people, and they will be the last to return to cruising.

[drsel]

 
another couple we cruise with said they don't know if they'll ever get on another cruise ship.
 
We were booked with them for December but we all canceled last month. We had refundable deposits so hopefully we will get them back by Christmas.

The cruise line have become smarter now.
At least since April 2020, the deposits are non-refundable

[drsel]

You are obviously not an older person with the means to sail the upscale lines. You need to read the boards of the upscale lines and see what the old folks are saying about their cruises. 
 

Kindly inform us what old folks are saying about the upscale Cruise lines

[crewsweeper]

8 minutes ago, drsel said:

19 minutes ago, fyree39 said:

You are obviously not an older person with the means to sail the upscale lines. You need to read the boards of the upscale lines and see what the old folks are saying about their cruises. 
 

Kindly inform us what old folks are saying about the upscale Cruise lines

This old Geezer says: "Too rich for my blood."

[drsel]

I think they are too expensive for most people.

[crewsweeper]

On ‎6‎/‎23‎/‎2020 at 9:12 PM, drsel said:

Moody's Ba2 rating is similar to BB, one notch above the new S&P downgraded rating of BB-

 

S&P downgrade by 3 levels from BBB- to BB- is extreme.

 

Remember these rating agencies aren't looking long term and often miss call their ratings.  Case in point all the AAA stuff back in 2008 that went belly up.

 

Some Value Equity managers use Merton's Default Model as one tool and are seeing potential in cruise lines not default or bankruptcy.

[drsel]

 

 

 

Remember these rating agencies aren't looking long term and often miss call their ratings.  Case in point all the AAA stuff back in 2008 that went belly up.

 

Some Value Equity managers use Merton's Default Model as one tool and are seeing potential in cruise lines not default or bankruptcy.

Wow that's interesting !

kindly enlighten us about Mertons Default Model with respect to Carnival corporation

 

[drsel]

This is not an economics class. You're a bore. Thanks for playing.

I didn't ask you. I asked crewsweeper, who knows about it

 

And no personal attacks please

[crewsweeper]

3 minutes ago, drsel said:

 

 

 

 

Wow that's interesting !

kindly enlighten us about Mertons Default Model with respect to Carnival corporation

 

You don't want to dive into that pool.  Remember its a tool, one of many, and a model, subject to all the error and omissions models have. 

 

1 minute ago, fyree39 said:

This is not an economics class. You're a bore. Thanks for playing.

Touche!

 

 

[crewsweeper]

10 minutes ago, drsel said:

 

 

 

 

Wow that's interesting !

kindly enlighten us about Mertons Default Model with respect to Carnival corporation

 

Here's some links to the Merton Default Model so you can learn about it yourself.

Do  note that equity geeks apply the probabilities to various factors when adjusting for value.  Adds a bit of nuance.  But Cash Flow and Gross Profit to valuations are still the key .

https://breakingdownfinance.com/finance-topics/risk-management/merton-model/

 

https://www.mathworks.com/help/risk/default-probability-using-the-merton-model-for-structural-credit-risk.html

[jimbo5544]

15 hours ago, coevan said:

unfortunately booking do not equal departures

What it does show is pent up demand.  Their business was sound before the virus, it will be again when it is over 

[drsel]

What it does show is pent up demand.  Their business was sound before the virus, it will be again when it is over 

I just hope so. I am really keen on cruising as soon as possible.

But on the other threads, everyone advises not to give them fresh money and not do any bookings until cruising actually restarts and we get to see what is the new normal in cruising.

[BlerkOne]

11 minutes ago, drsel said:

I just hope so. I am really keen on cruising as soon as possible.

But on the other threads, everyone advises not to give them fresh money and not do any bookings until cruising actually restarts and we get to see what is the new normal in cruising.

 

I put a deposit on a new cruise yesterday. Not a replacement.

 

On models and what not, as with inertia, for every model, there is likely an equal and opposite model.

[jimbo5544]

13 minutes ago, drsel said:

I just hope so. I am really keen on cruising as soon as possible.

But on the other threads, everyone advises not to give them fresh money and not do any bookings until cruising actually restarts and we get to see what is the new normal in cruising.

People need to make their own choices.  I value my cabin choice on every cruise, so I book early.  There are no guarantees when the CDC will work with instead of issue mandates to cruise lines.  Despite the bashers comments, Carnival wants to cruise as soon as they can.  

[travelhound]

20 hours ago, jimbo5544 said:

People need to make their own choices.  I value my cabin choice on every cruise, so I book early.  There are no guarantees when the CDC will work with instead of issue mandates to cruise lines.  Despite the bashers comments, Carnival wants to cruise as soon as they can.  

Yup, I usually book more than a year out to get the early saver discount and also have the best room selection.

[crewsweeper]

22 minutes ago, fyree39 said:

I'm curious, are you a CPA? Broker? This is one area that I always struggled with: finance. I'm currently moving my 401K from my old employer to a brokerage firm and my new broker speaks the language. I told him he's got 8 years to play with this particular 401K (I have other retirement thingies) and make it look nicer. He's going with something called "conservatively moderate," but I think I'll give him about a quarter of it to go "moderately aggressive." I mean, 8 years it a good amount of time for a recovery, don't you think? And if I lose that quarter of the 401K, it won't break me, but it could really help in the long run if things go well.

 

I'm  CFA. Currently manage institutional investment portfolios for a large pension fund.

You need to look at the fees and frequency of trading your broker is going to do.

If he is placing you in mutual funds, make sure they are the lowest fee class for that fund (you keep more).

Also take a look at the wealth of information for individuals available on Mutual Fund Observer's website.

If the broker is placing you in individual stocks do some research on each of them on your own.  Know what you own and why.

 

8 years can lead to good recovery.  Remember it took large cap stocks nearly 5 to break even after the lows in the 2007-2009 FC.  Be sure you are prepping for decumulation/ income starting about 5 years from the time you need money.  Doesn't mean shift entirely to bonds but do lower extreme equity risk.

 

Good luck.

[drsel]

But aren't US interest rates nearly 0% and bond prices at crazy high levels?

[TNcruising02]

Mine is managed with some in stocks, some in bonds, and some cash.  When stocks go low, they buy more stocks.  When stocks are high, they sell and buy bonds.  Something like that.  Anyway, the buy low sell high thing kind of stuck.  I really leave my investments to people who understand these things better than I do.  I am just playing around with the Carnival and travel stocks.  It looks like a good deal to buy when they are really low.  I am not investing my retirement, so it's really very little risk to me.  Nothing I can't afford to lose.  More power to the people who do these things for a living.

Edited June 26, 2020 by TNcruising02

[BlerkOne]

Carnival (NYSE:CCL) prices its first-priority senior secured term loan facility, consisting of a $1.86B tranche and a €800M tranche, with a maturity of five years and expected closing date on June 30, 2020.

[Honolulu Blue]

48 minutes ago, BlerkOne said:

Carnival (NYSE:CCL) prices its first-priority senior secured term loan facility, consisting of a $1.86B tranche and a €800M tranche, with a maturity of five years and expected closing date on June 30, 2020.

 

So this is what they're going to use to pay off their near-term loans.  Thanks for sharing.  It looks like the US$ notes will yield 8.5% and the Euro notes will yield 7.5%, plus they're offered at a discount, which will add more yield.  It's a better deal than they got in April.