Should the Cruise Industry be bailed out?

[livingonthebeach]

Interesting replies and some very valid points of view.  The nays outweigh the yays so far.  I did some further reading and it turns out the Fed did not directly buy those bonds.  Here's what is written in another article:

 

"The moves the Federal Reserve made in March to unfreeze credit markets had the indirect effect of making it easier for Carnival Corp. and other struggling companies to raise money from private investors.

 

In fact, the Federal Reserve in theory can’t buy Carnival Corp. debt. Under the terms of the Federal Reserve’s new Secondary Market Corporate Credit Facility (SMCCF), the emergency program it announced in March to inject liquidity into the bond market, the agency only can buy debt issued by investment-grade U.S. companies. Carnival Corp. is not a U.S. company."

Wondering why NCL and Royal didn't jump on the opportunity.

 

 

[lovescats5]

If we would stop our funding of other countries, most of which would not give us the time of day, then we would have plenty of money to help the cruise lines.  I know they are not registered in the US but they account for quite a bit of revenue for the states that have ports.  Although many jobs they provide are not permanent neither is my son's.  Being an electrician he only works when there is work to do (he is in the commercial area) and right now he is not working so how is that any different than dock workers. 

[firefly333]

24 minutes ago, livingonthebeach said:

Interesting replies and some very valid points of view.  The nays outweigh the yays so far.  I did some further reading and it turns out the Fed did not directly buy those bonds.  Here's what is written in another article:

 

"The moves the Federal Reserve made in March to unfreeze credit markets had the indirect effect of making it easier for Carnival Corp. and other struggling companies to raise money from private investors.

 

In fact, the Federal Reserve in theory can’t buy Carnival Corp. debt. Under the terms of the Federal Reserve’s new Secondary Market Corporate Credit Facility (SMCCF), the emergency program it announced in March to inject liquidity into the bond market, the agency only can buy debt issued by investment-grade U.S. companies. Carnival Corp. is not a U.S. company."

Wondering why NCL and Royal didn't jump on the opportunity.

 

 

If carnival crop is headquartered here, maybe it is considered a US company, I'd have to look into that. The ships might not be registered here, but carnival corp might be, idk. I am sure the fed chairman answered as if the bundle of bonds the fed bought directly or as you say in the secondary market contained carnival corp bonds. Traded only on usa and London stock market. 

 

The fed chairman definitely indicated carnival bonds were in the bundle the fed bought... I'm sure some of those small business loans went to undeserving companies too. 

 

Carnival Corporation & Plc

3655 NW 87th Avenue
Miami, FL 33178
United States
305 599 2600
http://www.carnivalcorp.com

 

Carnival Corporation common stock is traded on the New York Stock Exchange under the symbol CCL. Carnival plc is traded on the London Stock Exchange under the symbol CCL and as an ADS on the New York Stock Exchange under the symbol CUK. 

 

 

Edited April 30, 2020 by firefly333

[livingonthebeach]

3 minutes ago, firefly333 said:

If carnival crop is headquartered here, maybe it is considered a US company, I'd have to look into that. The ships might not be registered here, but carnival corp might be, idk. I am sure the fed chairman answered as if the bundle of bonds the fed bought directly or as you say in the secondary market contained carnival corp bonds. Traded only on usa and London stock market. 

 

Carnival Corporation & Plc

3655 NW 87th Avenue
Miami, FL 33178
United States
305 599 2600
http://www.carnivalcorp.com

 

Carnival Corporation common stock is traded on the New York Stock Exchange under the symbol CCL. Carnival plc is traded on the London Stock Exchange under the symbol CCL and as an ADS on the New York Stock Exchange under the symbol CUK. 

 

 

 

"Carnival Corporation was incorporated in Panama in 1972 and Carnival plc was incorporated in England and Wales in 2000. Carnival Corporation and Carnival plc operate a dual listed company (“DLC”), whereby the businesses of Carnival Corporation and Carnival plc are combined through a number of contracts and through provisions in Carnival Corporation’s Articles of Incorporation and By-Laws and Carnival plc’s Articles of Association. The two companies operate as if they are a single economic enterprise with a single senior executive management team and identical Boards of Directors, but each has retained its separate legal identity. "

https://www.sec.gov/Archives/edgar/data/815097/000119312513027239/d387954d10k.htm

[firefly333]

Arnold Donald ceo just happens to be on fbn right now being interviewed for those interested. 

 

He said they definitely wouldnt incorporate in the US just to get a stimulus pkg ... so ain't going to happen. Just the bonds and stock.

Edited April 30, 2020 by firefly333

[Roger88]

Cruise industry is one of the biggest money makers in the United States. No doubt that the government will support it one way or another. The question is whom will they choose to support. Would it be big players of the industry or smaller business trying to survive? Will see

[livingonthebeach]

15 minutes ago, firefly333 said:

Arnold Donald ceo just happens to be on fbn right now being interviewed for those interested. 

 

He said they definitely wouldnt incorporate in the US just to get a stimulus pkg ... so ain't going to happen. Just the bonds and stock.

 

Issuing stocks and bonds might not keep them or the cruise industry in business if there is no relief of this pandemic soon.

 

"Carnival says that it needs $1 billion monthly to continue operating, even if it's not catering to passengers. It costs $2 million to $3 million per month to maintain a temporarily decommissioned ship in a high state of readiness to be brought back into service."

https://www.fool.com/investing/2020/04/01/carnival-boosts-its-bond-offering-after-a-red-hot.aspx

 

 

[firefly333]

He has said they have enough cash to get thru this year. No one knows when they will sail again. He said every country is different. Most of their money comes from outside the US.

 

He also touched on the cdc order saying it pertained to maintaining their ships and crew still out at sea, not to when they set sail again. That was new to me, as I thought it was about restarting cruising, but he said it wasnt. 

 

Also about future bookings, blah blah blah. Anyway she asked him point blank about trying to qualify for US stimulus and the answer was no, they get more money outside the US than from the US. 

[Sunshine3601]

No bailout should be given to cruiselines.     There are far too many other US Citizens and US registered/licenses small businesses that should receive help.    Too big of a list to write now.     How about all the homeless, those who cannot afford to feed their children or pay for their health insurance - now and before covid-19, etc. etc. etc.        

[livingonthebeach]

15 minutes ago, firefly333 said:

He has said they have enough cash to get thru this year. No one knows when they will sail again. He said every country is different. Most of their money comes from outside the US.

 

And most of his passengers come from North America.  If Americans aren't confident cruising, then his ships can sail nearly empty anywhere in the world outside the US.

 

 

Edited April 30, 2020 by livingonthebeach

[firefly333]

AnywaySame article posted to carnival boards. 2 replies. Political hack job. Agreed.

 

The subject is moot, cruiselines say ain't going to happen.

 

True more cruises from here, but they are cheaper ones too. I just posted what the ceo said. 

 

Anyway, posting the headline like it's possible is just to get people stirred up imo. Then people can go on about their own favorite bail out candidate, the author of the article says post office. It's not going to happen. They arent getting a stimulus or loan from the US. 

 

Click bait headline for the unwary who dont follow news.

[HBE4]

 

I thought cruise lines were already being bailed out by customers who continue to book cruises that will never happen?

 

[livingonthebeach]

3 minutes ago, firefly333 said:

AnywaySame article posted to carnival boards. 2 replies. Political hack job. Agreed.

 

The subject is moot, cruiselines say ain't going to happen.

 

True more cruises from here, but they are cheaper ones too. I just posted what the ceo said. 

 

Anyway, posting the headline like it's possible is just to get people stirred up imo. Then people can go on about their own favorite bail out candidate, the author of the article says post office. It's not going to happen. They arent getting a stimulus or loan from the US. 

 

Click bait headline for the unwary who dont follow news.

 

The purpose of posting the article was to elicit opinions and to get informed information from those who cruise the most.  We learn a lot from bouncing ideas back and forth with each other. The debate was very civil until someone thought it was ok to attack the OP.  We all follow news and check our sources and for the most part, post informative opposing or non-opposing views in a polite and non-snarky manner.

[cruiserhal]

2 hours ago, soremekun said:

Yes... from the countries that they are incorporated in.

I totally agree with this comment.   

[Milwaukee Eight]

4 hours ago, karena1 said:

Cruise industry brings boatloads of money into this country, especially states that have ports like Florida.  I for one want them to succeed and be okay.

So, you didn’t answer the question. Do you think the US should bailout foreign flagged cruise ships?

[npcl]

5 hours ago, livingonthebeach said:

Understood that cruise lines are incorporated outside the US and their ships registered outside of the US and are not eligible for stimulus money or a bailout.  This article points out that the government has been buying corporate bonds from Carnival helping them raise cash in a sort of "back door" kind of aid.  The article states that the "cruise industry accounts for $8.5 billion in annual revenue to Florida, as well as 154,646 direct, indirect, and induced local jobs"  (Don't know how accurate this is since it was put out by the CLIA)

 

With this in mind, should the cruise industry receive any type of aid, or none at all?

https://www.usatoday.com/story/travel/cruises/2020/04/30/coronavirus-stimulus-plan-should-cruise-industry-bailed-out/3054804001/

First of all the government was not buying CCL bonds.  Any CCL bonds, if any are included in blind buckets of the market as a whole, not purchases aimed directly at CCL.  That information was a bit misleading.  The entire bond market was in trouble of freezing up, preventing any company from doing commercial financing.  As a result the fed pumped in a bunch of money into the bond market as a whole.  CCL was able float their bond offering for commercial bonds at 12% (a very high rate) because the fed moved to keep the market working, the same as many many other companies, not because of anything special being done for CCL.

 

 

Edited April 30, 2020 by npcl

[npcl]

3 hours ago, firefly333 said:

So you think carnival corp needs to be delisted from our stock exchange and not allowed to issue corporate bonds? 

They could always issue them in the UK since they are incorporated in England (as well as Panama) and are also on the London exchange.

[livingonthebeach]

1 minute ago, npcl said:

First of all the government was not buying CCL bonds.  That information was a bit misleading.  The entire bond market was in trouble of freezing up, preventing any company from doing commercial financing.  As a result the fed pumped in a bunch of money into the bond market as a whole.  CCL was able float their bond offering for commercial bonds at 12% (a very high rate) because the fed moved to keep the market working, the same as many many other companies, not because of anything special being done for CCL.

 

Yes, true -- that was determined after reading several articles and several posts later.  The major consensus is that the Fed created the liquidity for CCL to jump on the opportunity of issuing bonds at a better rate than it would have under other conditions. 

[npcl]

1 minute ago, livingonthebeach said:

 

Yes, true -- that was determined after reading several articles and several posts later.  The major consensus is that the Fed created the liquidity for CCL to jump on the opportunity of issuing bonds at a better rate than it would have under other conditions. 

Yes, prior to that the only interest they were getting was from a group of vulture funds that loan money to companies at extremely high rates, and often end up getting control of the company.  One of those interested was Apollo the company involved in NCL's private period prior to being brought back public a few years ago.

[surfone]

Maybe establish a go fun me account to help them out.  LoL    Guess that's not legal.  

Edited April 30, 2020 by surfone
used a website name

[ECCruise]

9 minutes ago, surfone said:

Maybe establish a go fun me account to help them out.  LoL    Guess that's not legal.  

Someone actually suggested that on another thread.  Really.  

[mac_tlc]

I ageee with the posters that have stated that buying a bond that needs to be replayed is not a bailout. A grant with no repayment is a bailout, not something that needs to be paid back. That’s a loan. 

[mac_tlc]

4 hours ago, flyguyjake said:

 

Why haven't we passed a federal $15 min wage? 

Anybody else find it ironic that the Federal unemployment stimulus was $600 a week, or $15/hour? Only for 12 weeks....... so far...
 

I know a lot of folks making more by not working than if they were still working. 

[Baron Barracuda]

4 hours ago, The Scurvy Pirate said:

 

Generally speaking, corporations do not pay "taxes" on their "profit" because that "profit" is passed to the shareholders through stock dividends.  The individual shareholders would then pay the "taxes" on those dividends.  The government doesn't tax the same "profit" twice (but give them time I am sure).  Corporations do pay a lot of taxes on the employer portion of income tax withholdings for FICA/FUTA, etc., taxes on real property, personal property, etc.

 

You've got this totally backwards.  Dividends are paid out of after-tax profits.  Then shareholders also pay tax on the dividends they receive.  There is absolute double-taxation.

Edited April 30, 2020 by Baron Barracuda

[Karma5]

Interesting......................very interesting............