Carnival Adding Another $1 Billion in Debt

[Lee Cruiser]

They continue to pile on the debt.  This time at 11% interest.  Hope it is sustainable.

 

https://www.fool.com/investing/2020/07/15/carnival-wants-to-add-even-more-debt-to-its-alread.aspx

[beerman2]

7 minutes ago, Lee Cruiser said:

They continue to pile on the debt.  This time at 11% interest.  Hope it is sustainable.

 

https://www.fool.com/investing/2020/07/15/carnival-wants-to-add-even-more-debt-to-its-alread.aspx

Not sure if I believe " The Motley FOOL"! But you never know and IF they did it's certainly stands to reason no cruies for awhile.

[embarkation75]

8 minutes ago, Lee Cruiser said:

They continue to pile on the debt.  This time at 11% interest.  Hope it is sustainable.

 

https://www.fool.com/investing/2020/07/15/carnival-wants-to-add-even-more-debt-to-its-alread.aspx

 

If ships aren't sailing by the end of the year, I doubt Carnival Corp makes it far into 2021 without filing for bankruptcy (chapter 11???).

[Lee Cruiser]

3 minutes ago, beerman2 said:

Not sure if I believe " The Motley FOOL"! But you never know and IF they did it's certainly stands to reason no cruies for awhile.

It is being report by others as well.  That's just the first one I read.

 

https://finance.yahoo.com/news/carnival-cruise-lines-looks-raise-103831498.html

[Lee Cruiser]

5 minutes ago, embarkation75 said:

 

If ships aren't sailing by the end of the year, I doubt Carnival Corp makes it far into 2021 without filing for bankruptcy (chapter 11???).

 

Certainly could be right.  Can't see how they can continue well into next year with very little revenue without doing something. 

[bury me at sea]

The blows just keep on coming.  

[stobe1]

37 minutes ago, beerman2 said:

Not sure if I believe " The Motley FOOL"! But you never know and IF they did it's certainly stands to reason no cruies for awhile.

 

The Motley Fool is actually a very reputable source for business news.

[embarkation75]

49 minutes ago, Lee Cruiser said:

 

Certainly could be right.  Can't see how they can continue well into next year with very little revenue without doing something. 

 

This is one reason I find it amusing to watch folks proudly state why they didn't book another cruise until late 2021 into 2022 because of the pandemic yet if Carnival isn't running by January, Carnival might be a shell of its former self by that point.  Many of those late 2021 into 2022 cruises will be getting canceled or highly modified if the ships are still sitting by next spring as Carnival can only borrow so much money before collapsing.

[HaveWeMetYet]

1 hour ago, embarkation75 said:

 

If ships aren't sailing by the end of the year, I doubt Carnival Corp makes it far into 2021 without filing for bankruptcy (chapter 11???).

There is not much Chapter 11 can do for the cruise lines. Maybe get out of some lease agreements at the ports and a few service provider contracts but not much else.

[Lee Cruiser]

11 minutes ago, embarkation75 said:

 

This is one reason I find it amusing to watch folks proudly state why they didn't book another cruise until late 2021 into 2022 because of the pandemic yet if Carnival isn't running by January, Carnival might be a shell of its former self by that point.  Many of those late 2021 into 2022 cruises will be getting canceled or highly modified if the ships are still sitting by next spring as Carnival can only borrow so much money before collapsing.

I haven't booked any new cruises during this time, but I do have two cruises booked for next year that were already booked.  In normal circumstances I would have booked an April 2022 cruise by now.  Typically book a long way out and just pay the deposit until final payment date.

[bury me at sea]

14 minutes ago, HaveWeMetYet said:

There is not much Chapter 11 can do for the cruise lines. Maybe get out of some lease agreements at the ports and a few service provider contracts but not much else.

 

They were on shaky ground with the last round of financing.  With this new deal they are beginning to resemble a house of cards.

[wo5m]

1 hour ago, HaveWeMetYet said:

There is not much Chapter 11 can do for the cruise lines. Maybe get out of some lease agreements at the ports and a few service provider contracts but not much else.

Not, true. All of the newer ships are actually financed in addition as other have pointed out they have accumulated a lot of other debt. Chapter 11 bankruptcy allows them to renegotiate with creditors and in some cases pause payments until they emerge from bankruptcy.  Why would a creditor what to do this? Well the other option is Chapter 7, where all the assets are essentially auctioned off. Since nobody is buying cruise ships right now, the creditors would take a huge loss if Carnival went under. With that in mind its in the best interest of the creditor to renegotiate under Chapter 11.    

[joeyancho]

11% ? Sounds like a get poor quick scheme. Where did they go for the loan? Payday loans? 

[NavyCruiser]

Too bad they can't issue unlimited 0.6% debt like the US Gov't does....

 

[Lee Cruiser]

14 minutes ago, joeyancho said:

11% ? Sounds like a get poor quick scheme. Where did they go for the loan? Payday loans? 

 

That's actually a little better than earlier this year.  High risk investment equals high interest return.

[Joebucks]

4 hours ago, joeyancho said:

11% ? Sounds like a get poor quick scheme. Where did they go for the loan? Payday loans? 

 

Loaning a billion dollars is a big risk because obviously, the company doesn't have that billion dollars to spare at the moment. Just because some CCs offer a 0% intro APR to get you into buying, doesn't mean anyone would front a billion without making it interesting for themselves.

[joeyancho]

9 minutes ago, Joebucks said:

 

Loaning a billion dollars is a big risk because obviously, the company doesn't have that billion dollars to spare at the moment. Just because some CCs offer a 0% intro APR to get you into buying, doesn't mean anyone would front a billion without making it interesting for themselves.

I understand how finance works,  being an investor myself. But thanks for the introductory lesson. 

[scpirate]

10 hours ago, embarkation75 said:

 

This is one reason I find it amusing to watch folks proudly state why they didn't book another cruise until late 2021 into 2022 because of the pandemic yet if Carnival isn't running by January, Carnival might be a shell of its former self by that point.  Many of those late 2021 into 2022 cruises will be getting canceled or highly modified if the ships are still sitting by next spring as Carnival can only borrow so much money before collapsing.

I'm one of the lucky ones that booked a 2022 cruise before this garbage happened.with gift cards at that so no cash refunds.it was my 5 day Cuba cruise that was cancelled and finally morphed into a 10 day journeys cruise.

[wickedwitch39]

Like Carnival is the only cruise line losing money?  I don't know why people speculate on what is going to happen when they don't have a clue how things will unfold. The whole travel industry is losing money - airlines, hotels, amusement parks, concert venues and the list goes on and on.  Those crystal balls are really getting a work out the last few months, eh?

[PhillyFan33579]

8 hours ago, wickedwitch39 said:

Like Carnival is the only cruise line losing money?  I don't know why people speculate on what is going to happen when they don't have a clue how things will unfold. The whole travel industry is losing money - airlines, hotels, amusement parks, concert venues and the list goes on and on.  Those crystal balls are really getting a work out the last few months, eh?

You don’t need a business degree from an Ivy League school to understand cruise lines cannot operate for an extended period without sustained revenue. People who invest in the stock market speculate every day. If the stock market wasn’t based on speculation, everyone who invested in the stock market would be rich.
 

You might not have a clue how things will unfold, but people with experience in this area can predict what is likely to happen if cruise lines don’t resume operations sooner than later. No company can survive for long with significantly increasing APs and shrinking ARs. 

[wickedwitch39]

 "No company can survive for long with significantly increasing APs and shrinking ARs." - THAT was my point.....you don't need to speculate about that - it's a fact. 

[BlerkOne]

One down, the rest will fail

https://www.theglobeandmail.com/world/article-us-judge-dismisses-lawsuits-by-grand-princess-cruise-ship-passengers/

 

 

[Joe817]

2 hours ago, BlerkOne said:

One down, the rest will fail

https://www.theglobeandmail.com/world/article-us-judge-dismisses-lawsuits-by-grand-princess-cruise-ship-passengers/

Good! IMO, it was the correct decision. Thanks for posting. 

 

 

[Dave0311]

4 hours ago, BlerkOne said:

One down, the rest will fail

https://www.theglobeandmail.com/world/article-us-judge-dismisses-lawsuits-by-grand-princess-cruise-ship-passengers/

 

 

Good news!

 

"The couple sought more than $1 million for putting their health at risk and causing trauma."

 

Seriously? $1 million for being afraid of catching the virus? Apparently they didn't actually get infected, which makes this even more absurd.