Carnival issuing more debt

[KirkNC]

More debt for CCL:

 

https://www.cruiseindustrynews.com/cruise-news/23149-carnival-raising-more-cash-short-term-loan-facility.html

 

 

[DeeDee Groff]

1 hour ago, KirkNC said:

More debt for CCL:

 

https://www.cruiseindustrynews.com/cruise-news/23149-carnival-raising-more-cash-short-term-loan-facility.html

 

 

 

Thank you for sharing this very interesting article, Kirk!

[AtlantaCruiser72]

So essentially another $2.6bn USD on the debt heap?!  Ouch!  But, if it keeps them solvent long enough to resume operations .....

 

I think once the dust settles from fleet rationalization we can expect cruise pricing to be up significantly for the next 4-5 years and an increased push for ancillary revenues as well. 

Edited June 28, 2020 by AtlantaCruiser72

[drsel]

Onboard spends and gratuities may increase, but I don't think the basic price will increase.

In fact I expect it to go down due to lack of demand.

Already on carnival Cruises for 2021, I have seen 4 price drops since 15 April 2020.

The prices are dirt cheap and still almost all the cabins are available.

 

 

[drsel]

Carnival Corporation intends to use the net proceeds from the term loan facility for general corporate purposes, *which includes the repayment of near-term debt maturities*.

Borrowing to repay past debt is a clear sign of falling into a debt trap

[ski ww]

We just had a price drop on our Jul 2021 14 Day British Isles Explorer cruise.

[Krazy Kruizers]

Thank you for the link.

 

Prices for cruises will most likely go down but spending on the ships and shore will go up.

[Gail & Marty sailing away]

6 hours ago, drsel said:

Onboard spends and gratuities may increase, but I don't think the basic price will increase.

In fact I expect it to go down due to lack of demand.

Already on carnival Cruises for 2021, I have seen 4 price drops since 15 April 2020.

The prices are dirt cheap and still almost all the cabins are available.

 

 

Holland America prices are up on some cruises.

[Himself]

3 hours ago, Gail & Marty sailing away said:

Holland America prices are up on some cruises.

As many know, I am a HAL loyalist.  I have sailed HAL for 24 years. Now I am being hit by Celebrity asking me to book by June 30th and offering me $400. in free drinks. I think they are trying to woo HAL people over.  They must also think I am a "lush!"   

[drsel]

As many know, I am a HAL loyalist.  I have sailed HAL for 24 years. Now I am being hit by Celebrity asking me to book by June 30th and offering me $400. in free drinks. I think they are trying to woo HAL people over.  They must also think I am a "lush!"   

That's interesting, can you send me the email or link

[Hlitner]

CCL keeps piling debt on top of debt and very unattractive terms for CCL.  One cannot help but wonder how they will ever repay their debt.  They have also issued a lot of convertible bonds (that can be converted into Common Stock at an attractive price) which will essentially water down the value of their stock...assuming the company survives.

 

Hank

[drsel]

CCL keeps piling debt on top of debt and very unattractive terms for CCL.  One cannot help but wonder how they will ever repay their debt.  They have also issued a lot of convertible bonds (that can be converted into Common Stock at an attractive price) which will essentially water down the value of their stock...assuming the company survives.
 
Hank

Isnt the US government doing the very same thing ?
Piling on debt of trillions of dollars??
CCL is only following the US governments example!

[KirkNC]

39 minutes ago, Hlitner said:

CCL keeps piling debt on top of debt and very unattractive terms for CCL.  One cannot help but wonder how they will ever repay their debt.  They have also issued a lot of convertible bonds (that can be converted into Common Stock at an attractive price) which will essentially water down the value of their stock...assuming the company survives.

 

Hank

Yes they have and it’s very expensive.  Don’t miss the 96 dollar or euro price.  That means they are paying much more then LIBOR + 7.50%.

[KirkNC]

4 hours ago, Gail & Marty sailing away said:

Holland America prices are up on some cruises.

Marty actually gets credit for this as he sent me the link earlier.

[Hlitner]

4 hours ago, Gail & Marty sailing away said:

Holland America prices are up on some cruises.

I think there is a bit of "smoke and mirrors" or perhaps a con job happening at HAL and other lines.  They have been giving out FCCs like candy which, from an accounting view, is an accounts payable or liability.  But by increasing the price of many cruises during the valid time to use FCCs they diminish the real value of those FCCs.  We had been booked on a 30 day April 2020 Westy cruise from Yokohama to Vancouver.  When HAL cancelled that cruise they refunded all our money and gave us a 25% FCC.  We quickly booked the April 2021 30 day cruise (Noordam) from Yokohama to Vancouver.  But the price of that cruise had increased just about 25% (surprise surprise) so even using the FCC we simply broke even.

 

Hank

[drsel]

But you are indeed very lucky and fortunate to have gotten a 100% full cash refund + 25% extra in FCC as a bonus

[DaveOKC]

43 minutes ago, drsel said:

But you are indeed very lucky and fortunate to have gotten a 100% full cash refund + 25% extra in FCC as a bonus

How did they do that - I thought it was one or the other??

 

[CJcruzer]

28 minutes ago, DaveOKC said:

How did they do that - I thought it was one or the other??

 

 

This is from the first, or one of the first cancellations, Asia only itineraries (+ transpacific crossing Yokohama > Vancouver) on the Westerdam of this past March-April.    

 

Those cruises, Feb 28, March 14, March 28, April 11, and April 25 were cancelled in one swoop - on February 20th (email received from HAL).    It only pertained to Asia sailings on the Westerdam.

 

The provisions were 100% refund, and 25% FCC toward a future booking.

 

At that time February 20, nothing more was known/decided regarding other sailings. The rampant  spread of Covid-19 was only beginning to affect Europe. Decisions at that time affected only the remainder of the 2020 spring Asia sailing season - as that was the hot topic and area.

 

Carol

Edited June 28, 2020 by CJcruzer

[Gail & Marty sailing away]

1 hour ago, KirkNC said:

Marty actually gets credit for this as he sent me the link earlier.

THANKS

[rkacruiser]

3 hours ago, drsel said:

Isnt the US government doing the very same thing ?
Piling on debt of trillions of dollars??
CCL is only following the US governments example!

 

There is a major difference.  The Federal Government can print more money and ignore the debt.  A private company cannot do the same.  

[rkacruiser]

15 hours ago, drsel said:

Borrowing to repay past debt is a clear sign of falling into a debt trap

 

I am concerned about that.

 

That is what concerns me very much.

16 hours ago, AtlantaCruiser72 said:

But, if it keeps them solvent long enough to resume operations .....

 

.....until when?  The longer this situation goes on and no revenue is booked....do I need to say more?  Is the Company expecting to "survive" on whatever they receive from ships that are sold for scrap or whatever if revenue from guests are not on the books?  That's not a world class business plan.  

 

 

[CJcruzer]

47 minutes ago, rkacruiser said:

 

There is a major difference.  The Federal Government can print more money and ignore the debt.  A private company cannot do the same.  

 

Bingo, you hit the nail on the head!    

[bouhunter]

44 minutes ago, rkacruiser said:

 

I am concerned about that.

 

That is what concerns me very much.

 

.....until when?  The longer this situation goes on and no revenue is booked....do I need to say more?  Is the Company expecting to "survive" on whatever they receive from ships that are sold for scrap or whatever if revenue from guests are not on the books?  That's not a world class business plan.  

 

 

The ships are collateral for debt.  The lenders would have to concur with the sale of any ships, and most certainly require the proceeds be applied to debt.

[rkacruiser]

1 hour ago, bouhunter said:

The ships are collateral for debt.  The lenders would have to concur with the sale of any ships, and most certainly require the proceeds be applied to debt.

 

And which company or consortium might you suggest that would buy such ships?  At this time, of course.  

[npcl]

3 hours ago, rkacruiser said:

 

I am concerned about that.

 

That is what concerns me very much.

 

.....until when?  The longer this situation goes on and no revenue is booked....do I need to say more?  Is the Company expecting to "survive" on whatever they receive from ships that are sold for scrap or whatever if revenue from guests are not on the books?  That's not a world class business plan.  

 

 

Selling the fully depreciated older ships is more a matter of reducing operational costs of keeping those ships (even with minimal crew).  Even a minimal selling prices (such as for scrap) provides some income, the reduction in operational costs helps even more.