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Why Carnival Shares Dropped on Tuesday

TheMotleyFool

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The stock of cruise line operator Carnival (NYSE: CCL)(NYSE: CUK) was down as much as 4.3% at midday Tuesday after the company announced a big debt repurchase. Shares were down 4.1% at 12:55 p.m. EDT today and were bouncing near their lows for the day.

Carnival has announced a tender offer for its 11.5% senior secured notes due 2023, which could cost up to $2 billion. The offer is for a total consideration of $1,142.50 per $1,000 in principal value of notes. This amounts to paying nearly a year's worth of interest up front just to buy back the debt right now.

Image source: Getty Images.

Source Fool.com

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