MF: Debt at Cruise Ship Lines Killing Stock

Motley Fool headline: Why Cruise Stocks Sank Again on Thursday
By Rich Smith - Jun 16, 2022 at 11:57AM…

This is actually not a surprising reaction. Consider that if the Fed does go through with a 0.75% rate hike in July, and then perhaps lets up on the brake just a tad at its subsequent September meeting and raises rates 0.5% then, this would still leave Carnival, Royal Caribbean, and Norwegian Cruise facing the prospect of paying two full percentage points more on their debt … than they were expecting to pay as recently as last month.

For Carnival, that works out to about $725 million more in interest payments on its $36.2 billion debt. For Royal Caribbean, investors can count on profits being lower (or losses higher) by $462 million given that company’s $23.1 billion debt. And Norwegian Cruise Line Holdings, the smallest of the three cruise operators, can expect to take an additional $285 million hit from higher interest rates.