Carnival Cruises 2008 Annual Report Download - page 72

F-13
(a) All interest rates are as of November 30, 2008. At November 30, 2008, 62%, 30% and 8%
(53%, 37% and 10% at November 30, 2007) of our debt was U.S. dollar, euro and sterling-
denominated, respectively, including the effect of foreign currency swaps. At November
30, 2008, 74% and 26% (69% and 31% at November 30, 2007) of our debt bore fixed and
variable interest rates, including the effect of interest rate swaps, respectively.
Substantially all of our debt agreements contain one or more of the following financial
covenants that require us, among other things, to maintain minimum debt service coverage
and minimum shareholders' equity and to limit our debt to capital and debt to equity
ratios and the amounts of our secured assets and secured and other indebtedness.
Generally, if an event of default under any debt agreement occurs, then pursuant to cross
default acceleration clauses, substantially all of our outstanding debt and derivative
contract payables (See Note 10) could become due, and all debt and derivative contracts
could be terminated. At November 30, 2008, we believe we were in compliance with all of
our debt covenants.
(b) A portion of two Princess ships has been financed with export credit facilities having
both fixed and variable interest rate components.
(c) In 2008, we borrowed $523 million, $443 million and $353 million under three export
credit facilities, which proceeds were used to pay a portion of Ventura, Carnival
Splendor and Ruby Princess purchase prices, respectively. These facilities bear an
aggregate weighted-average interest rate of 4.3% at November 30, 2008, and are repayable
in semi-annual installments through 2020.
(d) Includes an aggregate $3.1 billion of debt whose interest rate will increase upon a
reduction in the senior unsecured credit ratings of Carnival Corporation or Carnival plc
from A-/A3 to BBB/Baa2 and will increase further upon additional credit rating
reductions, exclusive of the amount shown in Note(g).
(e) In June 2008, we borrowed $500 million, of which a portion of the proceeds were
effectively used to pay a portion of Eurodam's purchase price. The loan principal is due
in seven years and interest is paid semi-annually. The lenders have a one-time option on
the third anniversary of the loan to elect to switch the interest rate to a floating rate
of LIBOR plus 55 basis points ("bps").
(f) Carnival Corporation, Carnival plc and certain of Carnival plc's subsidiaries are parties
to an unsecured multi-currency revolving credit facility for $2.0 billion (comprised of
$1.2 billion, €400 million and £200 million) (the "Facility"). Under the Facility we can
draw loans in U.S. dollars, euros and sterling.
(g) Includes an aggregate $1.4 billion of debt whose interest rate and, in the case of the
Facility, its commitment fees, will increase upon a reduction in the senior unsecured
credit ratings of Carnival Corporation or Carnival plc from A-/A3 to BBB+/Baa1 and will
increase further upon additional credit rating reductions.
At November 30, 2008, the scheduled annual maturities of our debt was as follows (in
millions):
There-
2009 2010 2011 2012 2013 after
Short-term borrowings $ 256
Facility 649 $ 142
Convertible notes 271 $ 595
Other long-term notes 432 $1,001 432 934 $1,357 $3,274
Total $1,608 $1,001 $1,027 $1,076 $1,357 $3,274
Debt issuance costs are generally amortized to interest expense using the straight-line
method, which approximates the effective interest method, over the term of the notes or the
noteholders first put option date, whichever is earlier. In addition, all debt issue
discounts are amortized to interest expense using the effective interest rate method over the
term of the notes.
Revolving Credit Facilities
We are required to pay a commitment fee of 30% of the margin per annum on the undrawn
portion of the Facility. If more than 50% of the Facility is drawn, we will incur an
additional 5 bps utilization fee on the total amount outstanding. All of the Facility