CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

Carnival Corp share price set to trade lower after borrowing billions amid Covid-19

Carnival is likely to see its stock trade lower after paying a whopping 7.5% interest on top of interbank rates to borrow $2.8 billion to strengthen its balance sheet due to the economic impact of the coronavirus pandemic.

Carnival Corporation is likely to see its stock trade lower after it was forced to pay a whopping 7.5% interest on top of interbank rates to borrow $2.8 billion to strengthen its balance sheet due to the economic impact of the coronavirus pandemic.

The senior secured term loans are comprised of two tranches issued against 96% of the face value of its shipping fleet, with the hefty interest rate a reflection of its recent credit rating downgrade to junk status by Standard & Poor’s earlier this month.

‘Carnival Corporation intends to use the net proceeds from the term loan facility for general corporate purposes, which includes the repayment of near-term debt maturities,’ the company said in a statement.

The beleaguered British-American cruise operator has been forced to shutdown amid the Covid-19 outbreak, with investors concerned that the industry may never set sail again so long as the coronavirus pandemic persists.

Carnival has already cancelled voyages on its lines, including P&O Cruises and Princess, through the peak summer season with the US and other countries banning ships from mooring.

Carnival Corporation posts $4.4 billion quarterly loss

Due to the challenging market conditions brought about by the coronavirus pandemic, Carnival’s share price is down 67% year-to-date, with the stock likely to fall further the longer its ships remain at a standstill.

In its second quarter (Q2), the cruise operator reported a $4.4 billion loss, down from a profit of $451 million in the same period last year, with the company warning investors of further losses to come.

‘The company is currently unable to provide an earnings forecast,’ Carnival Corporation said in a statement. ‘The pause in guest operations is continuing to have material negative impacts on all aspects of the company's business.’

‘The longer the pause continues, the greater the impact on the company's liquidity and financial expectations,’ the company added.

Carnival Corporation closed 6% higher on Monday at $16.78, with the stock falling below the $8 per share mark in April – a level the stock could return to if the Covid-19 pandemic persists.

Carnival Corporation extends pause of operations to September

Earlier this month, the cruise operator said that it will extend its operational pause of its cruises in North America until the end of September as a result of the coronavirus pandemic.

‘We have watched with great interest as commerce, travel and personal activities have begun to start back up, and once we do resume service, we will take all necessary steps to ensure the health and safety of our guests, crew and the communities we bring our ships to in order to maintain public confidence in our business,’ Carnival Cruise Line President Christine Duffy said in a letter to customers.

‘Nevertheless, we apologise for disrupting your vacation plans and appreciate your patience as we work through these decisions.’

How to trade stocks with IG

Looking to trade Carnival Corporation and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Carnival PLC’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.