5 ms·

If the public wouldn't buy airlines stock because of "bankruptcy risk" then why was Carnival Cruise Lines able to raise more than $6bn in debt and equity recent

by whatok 7y ago

If the public wouldn't buy airlines stock because of "bankruptcy risk" then why was Carnival Cruise Lines able to raise more than $6bn in debt and equity recently?

toomuchtodo 7y ago
Because Saudi Arabia bought a lot of that equity. Not who I want being a majority (EDIT: s/majority/substantial) owner in my country's airlines if they need a bailout; have the US Treasury own them. https://www.businessinsider.com/saudi-arabias-sovereign-wealth-fund-buys-a-stake-in-carnival-2020-4 https://www.businessinsider.com/saudi-arabias-sovereign-weal...
- whatok 7y ago
  That's incorrect. PIF's stake was as of 3/26 while CCL did the equity deal on 4/1. I don't know if they participated in that equity deal but they would have to disclose if they increased ownership. The equity deal was only $500mm vs $5.75bn in converts and 1st lien bonds. Non-insiders did not know PIF invested in the company when they raised this recent $ so it's not like that was some sort of anchor. Also, given their recent investments, PIF owning a significant stake in anything should make you run the other way.
  - toomuchtodo 7y ago
    I'll have to go through the disclosures before I speak more confidently about the recent equity activity in CCL, but PIF did very recently disclose they acquired 43.5 million shares, a 8.2% stake in CCL. This makes PIF their second-largest investor. This surely contributed in CCLs ability to do a rapid raise right after. I corrected my terminology faux pax above.
    - whatok 7y ago
      I'm telling you as a market participant that PIF's stake was not known at the time. Here's a link to CCL on EDGAR: https://www.sec.gov/cgi-bin/browse-edgar?company=carnival+cruise+lines&owner=exclude&action=getcompany https://www.sec.gov/cgi-bin/browse-edgar?company=carnival+cr... The filing date for the 13G was yesterday. Link to said 13G: https://www.sec.gov/Archives/edgar/data/815097/000101143820000114/form_sc13g-carnival.htm https://www.sec.gov/Archives/edgar/data/815097/0001011438200...
      - toomuchtodo 7y ago
        You're right, I stand corrected. Thanks for the links.

by whatok 7y ago

If the public wouldn't buy airlines stock because of "bankruptcy risk" then why was Carnival Cruise Lines able to raise more than $6bn in debt and equity recently?

toomuchtodo 7y ago

Because Saudi Arabia bought a lot of that equity. Not who I want being a majority (EDIT: s/majority/substantial) owner in my country's airlines if they need a bailout; have the US Treasury own them. https://www.businessinsider.com/saudi-arabias-sovereign-wealth-fund-buys-a-stake-in-carnival-2020-4 https://www.businessinsider.com/saudi-arabias-sovereign-weal...

whatok 7y ago
That's incorrect. PIF's stake was as of 3/26 while CCL did the equity deal on 4/1. I don't know if they participated in that equity deal but they would have to disclose if they increased ownership. The equity deal was only $500mm vs $5.75bn in converts and 1st lien bonds. Non-insiders did not know PIF invested in the company when they raised this recent $ so it's not like that was some sort of anchor. Also, given their recent investments, PIF owning a significant stake in anything should make you run the other way.
- toomuchtodo 7y ago
  I'll have to go through the disclosures before I speak more confidently about the recent equity activity in CCL, but PIF did very recently disclose they acquired 43.5 million shares, a 8.2% stake in CCL. This makes PIF their second-largest investor. This surely contributed in CCLs ability to do a rapid raise right after. I corrected my terminology faux pax above.
  - whatok 7y ago
    I'm telling you as a market participant that PIF's stake was not known at the time. Here's a link to CCL on EDGAR: https://www.sec.gov/cgi-bin/browse-edgar?company=carnival+cruise+lines&owner=exclude&action=getcompany https://www.sec.gov/cgi-bin/browse-edgar?company=carnival+cr... The filing date for the 13G was yesterday. Link to said 13G: https://www.sec.gov/Archives/edgar/data/815097/000101143820000114/form_sc13g-carnival.htm https://www.sec.gov/Archives/edgar/data/815097/0001011438200...
    - toomuchtodo 7y ago
      You're right, I stand corrected. Thanks for the links.