CCL offers another 1 Billion in common stock :(

[gilboman]

4 hours ago, Mary229 said:

Yes, this is the fine detail that needs be mentioned.  Don’t expect to pay for a cruise well in advance then have it refunded due to insolvency.  US law has a very narrow time frame.  In another post I also mentioned avoiding cruise lines who require full payment many, many months in advance.  To me that is a tell.   This is what happened to Crystal passengers. There are other lines who require full payment up to a year in advance.

 

I totally agree with many people betting on that FCC and losing their consumer rights.   the fine details on those provisions had the passenger sign away their rights in order to get as little as a 10% bonus.   Discounts are powerful

 

😉smiling as I sit here and write a promotional email offering serious discounts to my wholesale customers 

Wow...so glad I'm in Canada!

[HappyInVan]

7 hours ago, BermudaBound2014 said:

 

   

7 hours ago, BermudaBound2014 said:

CCL just 'spun off' 12 of their newer ships to a brand new company called Carnival Bermuda for the purpose of borrowing enough money to make immediate payments due. At this point, anything is possible.

 

 

That's not good news. Means that the lenders would prefer to foreclose and sell the subsidiary than to restructure CCL.

Makes sense. The subsidiary would have Carnival's newest and best ships at bargain prices. They'll not need to wade through CCL's complexity and legacy issues.

The problem for CCL and it's brands is that once this happens, it will have a cascade effect! 

[Mary229]

7 hours ago, gilboman said:

Wow...so glad I'm in Canada!

I think very few people truly understand their protections.  In Canada as in the US credit card disputes generally must be filed within 60 days of appearing on your statement.  There is flexibility at the discretion of the bank of that but the mandate is 60 days

Edited October 22, 2022 by Mary229

[Mary229]

3 hours ago, HappyInVan said:

 

That's not good news. Means that the lenders would prefer to foreclose and sell the subsidiary than to restructure CCL.

Makes sense. The subsidiary would have Carnival's newest and best ships at bargain prices. They'll not need to wade through CCL's complexity and legacy issues.

The problem for CCL and it's brands is that once this happens, it will have a cascade effect! 

The ships given for collateral were “unencumbered”. New ships are laden with debt and therefore are not desirable as collateral 

Edited October 22, 2022 by Mary229

[BermudaBound2014]

2 hours ago, Mary229 said:

The ships given for collateral were “unencumbered”. New ships are laden with debt and therefore are not desirable as collateral 

 

Which has me wondering if this article was printed incorrectly. Or is there some twist on words with "became operational in the last 2 years"? 

 

[Mary229]

Just now, BermudaBound2014 said:

 

Which has me wondering if this article was printed incorrectly. Or is there some twist on words with "became operational in the last 2 years"? 

 

That is what threw me off also.  I pondered  if they meant since the pandemic.  Certainly no intelligent person would take collateral of a property that is mortgaged to the hilt. That is called buying debt.

[BermudaBound2014]

2 minutes ago, Mary229 said:

That is what threw me off also.  I pondered  if they meant since the pandemic.  Certainly no intelligent person would take collateral of a property that is mortgaged to the hilt. That is called buying debt.

 

Lots of games. There are so many word twists in these corporate press releases. I suppose all CCL ships 'became operational in the last 2 years" since all ships were out of operation during the pandemic. Maybe that's what they meant.

[Mary229]

Just now, BermudaBound2014 said:

 

Lots of games. There are so many word twists in these corporate press releases. I suppose all CCL ships 'became operational in the last 2 years" since all ships were out of operation during the pandemic. Maybe that's what they meant.

Exactly, the press release is not guidance. I would love to see the covenant and the list of ships

[BermudaBound2014]

3 minutes ago, Mary229 said:

Exactly, the press release is not guidance. I would love to see the covenant and the list of ships

 

For sure. I would also like to see who put up the money. 

[Mary229]

1 minute ago, BermudaBound2014 said:

 

For sure. I would also like to see who put up the money. 

I assume this has to be disclosed sooner or later.  Just peeked at the SEC filings and there is nothing new further than what we already are discussing 

[rodndonna]

2 hours ago, Mary229 said:

I think very few people truly understand their protections.  In Canada as in the US credit card disputes generally must be filed within 60 days of appearing on your statement.  There is flexibility at the discretion of the bank of that but the mandate is 60 days

 

I know our card (Canadian TD Visa) was (still is?) 120 days as I attempted to reclaim flight costs for the defunct "Interjet" airlines. Sadly in that case it was a slow road to oblivion for Interjet as they issued credits at the start of the "2020 ugliness" cancellation and then just never came back.

 

Luckily it was pretty cheap flights (-:

[rodndonna]

7 minutes ago, Mary229 said:

I assume this has to be disclosed sooner or later.  Just peeked at the SEC filings and there is nothing new further than what we already are discussing 

 

My husband thought he counted 12 Costa ships under CCL (after one was transferred out recently or something like that) so we have our bets on Costa.

[Mary229]

1 minute ago, rodndonna said:

 

My husband thought he counted 12 Costa ships under CCL (after one was transferred out recently or something like that) so we have our bets on Costa.

I am betting on the European lines also.  The money is right now in North America.  They transferred two Costa ships, if I recall correctly one to California under Carnival and one to Australia under P&O, don’t quote me on that .

[BermudaBound2014]

I believe CCL  has moved 4 ships out of Costa and into Carnival since the pandemic. I also believe two of those ships were very new. I'm on the run and don't have time to look up the exact ships. I'll get later if someone doesn't beat me to it. 

Edited October 22, 2022 by BermudaBound2014

[Mary229]

43 minutes ago, rodndonna said:

 

I know our card (Canadian TD Visa) was (still is?) 120 days as I attempted to reclaim flight costs for the defunct "Interjet" airlines. Sadly in that case it was a slow road to oblivion for Interjet as they issued credits at the start of the "2020 ugliness" cancellation and then just never came back.

 

Luckily it was pretty cheap flights (-:

Yes, 120 days is the limit. It used to be 60 days from statement which was in fact 90 days.  This is regardless of type of service and includes insolvency.  For HAL users it should be no problem as final payment is at most 90 days out, yes you would have to be quick but a chargeback only takes moments to file online.  It is not indefinite 

[HappyInVan]

3 hours ago, Mary229 said:

The ships given for collateral were “unencumbered”. New ships are laden with debt and therefore are not desirable as collateral 

 

I'm sure that the lenders and bankers have taken this into account. To ensure that there is enough cushion for themselves.

Edited October 22, 2022 by HappyInVan

[Mary229]

2 hours ago, HappyInVan said:

 

I'm sure that the lenders and bankers have taken this into account. To ensure that there is enough cushion for themselves.

I don’t think 12 new ships could possibly have that much collateral.  Carnival alone has taken ownership of at least three ships since 2020 plus the Luminosa and the Rotterdam.    Those have very little equity built into them currently 

[Guest ldtr]

10 hours ago, HappyInVan said:

 

That's not good news. Means that the lenders would prefer to foreclose and sell the subsidiary than to restructure CCL.

Makes sense. The subsidiary would have Carnival's newest and best ships at bargain prices. They'll not need to wade through CCL's complexity and legacy issues.

The problem for CCL and it's brands is that once this happens, it will have a cascade effect! 

Not necessarily.  Cruise lines often have subsidiaries for groups of or even individual ships.  The debt structures for cruise lines result in various different covenants which can be quite complex.  By forming subsidiaries it simplifies the arrangements and makes sure that new loans do not overlap and violate existing covenants.

 

In this case the original offering was for over 1 billion in notes.  The demand was so large that they expanded the offering to over  2 billion.  Also by doing it this way they were able to make it a private offering to qualified investors only.  

 

Lots of reasons to do this structure other than the participants looking at foreclosure.

 

The list of ships will basically be those not restricted under other covenants.

Edited October 22, 2022 by ldtr

[HappyInVan]

1 hour ago, Mary229 said:

I don’t think 12 new ships could possibly have that much collateral.  Carnival alone has taken ownership of at least three ships since 2020 plus the Luminosa and the Rotterdam.    Those have very little equity built into them currently 

 

Leave it to the corporate finance experts. They're smart, numerate and have access to the numbers.

 

What's the endgame? Rather than take part in a restructuring of the CCL group, a long term and messy project. The lenders are financing the subsidiary and helping to pay down the original mortgage. In a default, they could simply put the subsidiary into restructuring. White Knight shows up with just a couple of billion, reassures the mortgage lenders, pays off the senior lenders. Easy peasy.

 

Compared to a takeover of the entire group, which requires consensus among the senior lenders, go through the courts, pay a premium to the existing shareholders etc.

 

Yes, the smart sharks are circling. 

[Guest ldtr]

15 minutes ago, HappyInVan said:

 

Leave it to the corporate finance experts. They're smart, numerate and have access to the numbers.

 

What's the endgame? Rather than take part in a restructuring of the CCL group, a long term and messy project. The lenders are financing the subsidiary and helping to pay down the original mortgage. In a default, they could simply put the subsidiary into restructuring. White Knight shows up with just a couple of billion, reassures the mortgage lenders, pays off the senior lenders. Easy peasy.

 

Compared to a takeover of the entire group, which requires consensus among the senior lenders, go through the courts, pay a premium to the existing shareholders etc.

 

Yes, the smart sharks are circling. 

Nope.  Smart sharks are not circling.  They are getting a 9+% interest rate on a private offering.  If their was any expectation of a foreclosure they would most likely not be participating because their return would drop significantly if there was a real chance of BK and foreclosure.  

 

In addition if interest rates top out in the next year or two and start dropping the resale of the notes would yield an even better profit.  

 

Considering the CCL's balance sheet is in better shape than NCLH or RCL (as the number show in an earlier posting if there was to be a  foreclosure, the market for even new ships would be pretty non-existent since each of the mass market lines would be in the same shape, and the new ships are too large for the specialty lines and companies which so far have not gone after 3000+ size ships.  

 

Interesting how people seem to be so gleeful about the industry finances, which by the way are still a long way from even a restructure, let alone a foreclosure.

 

The possibility of a foreclosure really only comes up if you start to see capacity leveling out below the 100% range.  At 100% average or over the cash flow is quite sufficient.  May take 10-15 years to totally return to pre-covid debt levels but it would certainly be doable.  Even below 100% if they can show positive cash flow from operations that would pretty much take foreclosure off the table entirely, though it might leave the potential for restructuring in play if occupancy does not grow enough does not grow enough.

 

 

Edited October 22, 2022 by ldtr

[HappyInVan]

46 minutes ago, ldtr said:

Not necessarily.  Cruise lines often have subsidiaries for groups of or even individual ships.  The debt structures for cruise ...

 

Usually, big ticket investments (airliners and vessels) are placed in subsidiaries with just one asset. This allows the mortgage lender to quickly seize the asset without getting involved in the parent company's legal issues.

 

IMHO, it is significant that they have placed 12 ships in one subsidiary. This (plus the high interest rate) would explain the loan's popularity.

 

Look at it from the POV of new players. Capturing the parent conglomerate would take a lot of time, expense, cost and uncertainty.

 

In the event of the worst case occuring, there would be a hole in the industry. A new player could immediately start with 12 'clean' ships. Build a brand with industry veterans, or just purchase a brand with or without the ships.

 

As long as there is demand, there will be suppliers. We will still be cruising. 

 

Edited October 22, 2022 by HappyInVan

[rkacruiser]

5 hours ago, ldtr said:

Nope.  Smart sharks are not circling.  They are getting a 9+% interest rate on a private offering.  If their was any expectation of a foreclosure they would most likely not be participating because their return would drop significantly if there was a real chance of BK and foreclosure.  

 

In addition if interest rates top out in the next year or two and start dropping the resale of the notes would yield an even better profit.  

 

Considering the CCL's balance sheet is in better shape than NCLH or RCL (as the number show in an earlier posting if there was to be a  foreclosure, the market for even new ships would be pretty non-existent since each of the mass market lines would be in the same shape, and the new ships are too large for the specialty lines and companies which so far have not gone after 3000+ size ships.  

 

Interesting how people seem to be so gleeful about the industry finances, which by the way are still a long way from even a restructure, let alone a foreclosure.

 

The possibility of a foreclosure really only comes up if you start to see capacity leveling out below the 100% range.  At 100% average or over the cash flow is quite sufficient.  May take 10-15 years to totally return to pre-covid debt levels but it would certainly be doable.  Even below 100% if they can show positive cash flow from operations that would pretty much take foreclosure off the table entirely, though it might leave the potential for restructuring in play if occupancy does not grow enough does not grow enough.

 

 

 

This is one of the best posts that I have read on either this Message Board or on the Floataway Lounge Message Board about CCL.  

 

It took time for the cruise industry to establish itself into profitability.  It is going to take time for the re-establishment of profitability to return so that shareholders will receive dividends.  

[mcrcruiser]

7 hours ago, rkacruiser said:

 

This is one of the best posts that I have read on either this Message Board or on the Floataway Lounge Message Board about CCL.  

 

It took time for the cruise industry to establish itself into profitability.  It is going to take time for the re-establishment of profitability to return so that shareholders will receive dividends.  

It seems to  me that us getting $500 in recent OBC being a stock holder short term was worth the risk  for short term  .I would not hold this stock unless it was for a great grand child's college education as a gift from birth   .Then per haps it would be a good investment  . Not paying dividends is a major detractor with any stock. unless you can confirm that there will be a great increase in value of those shares .  Increasing  the float  by 2 billion shares  is a lot  of watering sown the existing   prior shares held by share holders   ,Additionally , if & when a new dividend may be declared by the board of directors    it cetainly will be a lot smaller than the prior dividend because of all these added shares  

[BermudaBound2014]

16 hours ago, rkacruiser said:

 

This is one of the best posts that I have read on either this Message Board or on the Floataway Lounge Message Board about CCL.  

 

It took time for the cruise industry to establish itself into profitability.  It is going to take time for the re-establishment of profitability to return so that shareholders will receive dividends.  

 

Agreed, it will take decades to ease the debt without reorganization. 

 

I would bet that CCL will not pay a dividend again in the next 20 years. I'm even leaning toward the shareholder OBC being reduced or eliminated when they vote next winter. Remember, shareholder OBC is only good thru July of 2023. Sure, CCL has always renewed this benefit, but times are changing.

[BermudaBound2014]

21 hours ago, ldtr said:

Lots of reasons to do this structure other than the participants looking at foreclosure.

 

 

I don't believe anyone is suggesting that this latest structuring is because CCL is looking at foreclosure in the immediate future.

 

CCL needed cash. This offering allowed them to borrow enough money to pay debt due.