As the novel coronavirus spread across the globe, forcing Carnival and its competitors to halt new sailings and give refunds to some customers, David Bernstein, Carnival's CFO, determined that the company's expenses would amount to $1 billion per month, according to The Wall Street Journal's report. While the company was able to draw down $3 billion from its credit lines, its stock and bond prices were falling, potentially making it harder to raise more money.
Carnival enlisted investment banks like JPMorgan to help it find $4 billion to $6 billion in new funding, The Wall Street Journal reported. JPMorgan reportedly landed on a group of hedge funds: Apollo, Centerbridge Partners, Elliott, GSO Capital Partners, and Oaktree Capital Management. The group's proposal included debt with an interest rate of over 15% and a possible ownership stake in Carnival, according to The Wall Street Journal.
After the Federal Reserve increased the size of its lending program in March, JPMorgan was reportedly able to find new buyers for Carnival debt. The cruise company eventually raised over $6 billion in debt and equity, with the traditional and convertible bonds carrying interest rates of
should have go for new business: WTI floating storage!
The FED has saved a lot of companies including Ford . Without this program the debt market will implode