Item 1.01 Entry into a Material Definitive Agreement.
On
The Loan Agreement provides for a first-priority senior secured term loan
facility (the "Term Loan Facility"), under which
All outstanding amounts under the Term Loan Facility funded in
Subject to certain exceptions and reinvestment rights, the Loan Agreement requires mandatory prepayments of 100% of the net cash proceeds from certain asset sales and certain casualty and condemnation events.
If
Obligations under the Loan Agreement are guaranteed, jointly and severally, on a
first-priority senior secured basis, by Carnival plc and the same subsidiaries
of
Obligations under the Loan Agreement are secured by first-priority security
interests in the collateral, which generally includes (i) shares of capital
stock of each subsidiary guarantor, subject to customary limitations; (ii) 85 of
the vessels currently owned or operated by
The Loan Agreement contains covenants that limit the ability of
merge, sell or otherwise dispose of all or substantially all of their assets; and (vii) enter into certain transactions with their affiliates. These covenants are subject to a number of important limitations and exceptions.
The Loan Agreement sets forth certain events of default after which the Loan
Agreement may be declared immediately due and payable and sets forth certain
types of bankruptcy or insolvency events of default involving
The description of the Loan Agreement above is qualified in its entirety by
reference to the text of the Loan Agreement, which will be filed with the next
joint periodic report of
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The information required by Item 2.03 relating to the Loan Agreement is contained in Item 1.01 of this Current Report on Form 8-K and incorporated herein by reference.
Cautionary Note Concerning Factors That May Affect Future Results
Forward-looking statements include those statements that relate to our outlook and financial position including, but not limited to, statements regarding:
• Net revenue yields • Net cruise costs, excluding fuel per available lower berth day • Booking levels • Estimates of ship depreciable lives and residual values • Pricing and occupancy •Goodwill , ship and trademark fair values • Interest, tax and fuel • Liquidity expenses • Currency exchange rates • Adjusted earnings per share • Impact of the COVID-19 coronavirus global pandemic on our financial condition and results of operations
Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied by our forward-looking statements. This note contains important cautionary statements of the known factors that we consider could materially affect the accuracy of our forward-looking statements and adversely affect our business, results of operations and financial position. Additionally, many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 outbreak. It is not possible to predict or identify all such risks. There may be additional risks that we consider immaterial or which are unknown. These factors include, but are not limited to, the following:
· COVID-19 has had, and is expected to continue to have, a significant impact on
our financial condition and operations, which impacts our ability to obtain acceptable financing to fund resulting reductions in cash from operations. The current, and uncertain future, impact of the COVID-19 outbreak, including its effect on the ability or desire of people to travel (including on cruises), is expected to continue to impact our results, operations, outlooks, plans, goals, growth, reputation, litigation, cash flows, liquidity, and stock price
· As a result of the COVID-19 outbreak, we have paused our guest cruise
operations, and if we are unable to re-commence normal operations in the near-term, and further extend covenant waivers for certain agreements for which waivers do not currently cover periods afterMarch 2021 (if needed), we may be out of compliance with a maintenance covenant in certain of our debt facilities
· World events impacting the ability or desire of people to travel may lead to a
decline in demand for cruises
· Incidents concerning our ships, guests or the cruise vacation industry as well
as adverse weather conditions and other natural disasters may impact the
satisfaction of our guests and crew and lead to reputational damage
· Changes in and non-compliance with laws and regulations under which we operate,
such as those relating to health, environment, safety and security, data privacy and protection, anti-corruption, economic sanctions, trade protection and tax may lead to litigation, enforcement actions, fines, penalties, and reputational damage
· Breaches in data security and lapses in data privacy as well as disruptions and
other damages to our principal offices, information technology operations and system networks and failure to keep pace with developments in technology may adversely impact our business operations, the satisfaction of our guests and crew and lead to reputational damage
· Ability to recruit, develop and retain qualified shipboard personnel who live
away from home for extended periods of time may adversely impact our business
operations, guest services and satisfaction
· Increases in fuel prices, changes in the types of fuel consumed and
availability of fuel supply may adversely impact our scheduled itineraries and
costs
· Fluctuations in foreign currency exchange rates may adversely impact our
financial results
· Overcapacity and competition in the cruise and land-based vacation industry may
lead to a decline in our cruise sales, pricing and destination options
· Geographic regions in which we try to expand our business may be slow to
develop or ultimately not develop how we expect
· Inability to implement our shipbuilding programs and ship repairs, maintenance
and refurbishments may adversely impact our business operations and the satisfaction of our guests
The ordering of the risk factors set forth above is not intended to reflect our indication of priority or likelihood.
Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuing obligations under applicable law or any relevant stock exchange rules, we expressly disclaim any obligation to disseminate, after the date of this document, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.
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