All the cruise lines are looking for more money

[npcl]

4 hours ago, TeeRick said:

But apparently Carnival did benefit in getting their loans backed by the US Fed bailout.

 

https://www.dailymail.co.uk/news/article-8262745/Carnival-Cruise-Line-raised-6billion-financing-Fed-intervened-save-businesses.html

That entire article is a bit false.  Carnival did not get their loans backed by the Fed.  What happened is the entire bond market was seizing up and the Fed moved to keep the bond market liquid.  Otherwise the entire economy would crash, because no company, no matter how good their credit would have been able to borrow.

 

In doing so Carnival, a company needing to borrow, was able to access the market for its bond offering at 12%, the same as thousands of other businesses.  The fed did nothing special for Carnival. There was nothing in the feds action that was aimed at Carnival, and the fed most certainly has not backed Carnivals bonds.

[npcl]

40 minutes ago, Baron Barracuda said:

 

Here's WSJ take on what happened.  Synopsis: Deteriorating financials prevented CCL from accessing public debt market forcing them to explore borrowing from vulture hedge funds at rates around 15%.  They were spared however when Federal Reserve propped up bond market by making open market purchase of investment grade corporate debt (hard to believe but CCL at bbb- is still investment grade credit).  This caused bond market to stabilize and allowed CCL to float their $6B public offerings.  Fed did not do this explicitly for CCL, they just benefited along with other investment grade credits.

 

https://www.wsj.com/articles/how-fed-intervention-saved-carnival-11587920400

Carnival's bond offering was in the junk range, not even investment grade.  

 

 

[Baron Barracuda]

3 hours ago, npcl said:

Carnival's bond offering was in the junk range, not even investment grade.  

 

 

New CCL debt was rated bbb- by Moody's.  That's still investment grade.  Has not been downgraded since.  RCL however was downgraded recently to BB (junk).

[npcl]

1 hour ago, Baron Barracuda said:

New CCL debt was rated bbb- by Moody's.  That's still investment grade.  Has not been downgraded since.  RCL however was downgraded recently to BB (junk).

Their rating is just above junk, but the loan interst rate was junk level, regardless of rating.