66 International Financing Review March 21 2020to increase its £135m revolving credit
facility as it sees a slowdown in parts of its
operations due to the coronavirus outbreak.
The RCF, which matures in August 2023,
is provided by Banco Santander, Lloyds Bank
and NatWest. The facility pays a margin of
125bp-225bp over Libor.
The virus has particularly affected JSG’s
hotels, restaurant and catering business,
which has seen reduced demand and a
SIGNIlCANTûREDUCTIONûINûPROCESSINGûVOLUMESû
The company’s workwear business has seen
a limited impact to date.
JSG has moved to limit capital
expenditure on plant and equipment and on
new textile rental items and has cancelled
all non-essential expenditure.
The company is also working to reduce
operational costs, particularly in the
businesses most affected by the drop off in
volumes, as well as in the wider group.
4HEûCOMPANYûHASûALSOûSCRAPPEDûITSûlNALû
dividend.NORTH AMERICA
UNITED STATES
CARNIVAL DRAWS DOWN US$3bnCruise operator CARNIVAL has drawn down
53BNûFROMûITSûlVE
YEARûREVOLVINGûCREDITû
facility, the latest in a slew of travel and
leisure companies that are seeking to
increase liquidity as a precautionary
measure while global markets are rocked by
disruptions related to the coronavirus
outbreak.
The revolving credit facility, which
matures in August 2024, comprises a
US$1.7bn tranche, a €1bn tranche and a
€150m tranche.Bank of America is the administrative
agent, and lead arranger with Bank of
China, Barclays, BNP Paribas, Citigroup,
Goldman Sachs, Intesa Sanpaolo, JP Morgan,
Lloyds Bank, Mizuho, NatWest, and PNC.
The company said that the ongoing effects of
the virus would have a material impact on its
lNANCIALûRESULTSûANDûLIQUIDITYû#ARNIVALûWILLûTAKEû
other actions to shore up liquidity, including
capital expenditure and expense reductions, as
WELLûASûPURSUINGûADDITIONALûlNANCINGû4HEû
COMPANYûALSOûSAIDûITûEXPECTEDûTHEûlSCALûYEARûTOû
November 30 to result in a net loss.
Earlier this month, Moody’s downgraded
Carnival to Baa1 from A3 and placed its
ratings on review for further downgrades.
The ratings agency cited “expectation that
soft booking trends and increased
cancellations related to the coronavirus will
SIGNIlCANTLYûIMPACTû#ARNIVALSûEARNINGSûINû
2020, resulting in metrics outside of levels
appropriate for a Single A rating”.
S&P downgraded Carnival two notches on
Monday to BBB from A– and put the ratings
on credit watch negative.Ports around the world are being closed or
restricted as cancellations on trips pile up and
cause revenue losses for airlines, hotels and
cruise lines. Earlier this month, cruise ship
operators NORWEGIAN CRUISE LINE and ROYAL
CARIBBEAN, along with carrier UNITED AIRLINES,
lined up about US$3.23bn in new money.SIMON PROPERTY AMENDS US$6bn DEALReal estate investment trust SIMON PROPERTY
has amended and extended its US$4bn
revolving credit facility and a US$2bn
delayed-draw term loan facility.
There is a US$4bn multicurrency 45-
month revolving credit facility and a
US$2bn 27-month term loan.
Based on current credit ratings, pricing
for the amended RCF has been reduced to
70bp over Libor from 77.5bp.
JP Morgan and Bank of America are lead
arrangers and bookrunners. BNP Paribas,
Citigroup, Mizuho Bank, PNC, Societe Generale,
SMBC, US Bank and Wells Fargo are lead
arrangers and co-syndication agents.AMERICAS LOANS BOOKRUNNERS – FULLY
SYNDICATED VOLUME
BOOKRUNNERS: 1/1/2020 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)Proportional credit
Source: Refinitiv SDC code: R71 BofA Securities 225 58,444.7912.0
2 JP Morgan 196 53,207.81 10.9
3 Citigroup 121 42,413.67 8.7
4 Wells Fargo 156 35,228.13 7.2
5 Credit Suisse 70 22,242.94 4.6
6 Goldman Sachs 98 18,113.35 3.7
7 RBC 88 17,333.32 3.5
8 Morgan Stanley 52 15,679.97 3.2
9 Barclays 88 15,596.90 3.2
10 BMO 87 14,749.71 3.0
Total 777 488,592.72Airlines line up short-term loans
US JetBlue and American Airlines both raise US$1bn facilitiesJETBLUE AIRWAYS has borrowed US$1bn from a
new delayed-draw term loan, while AMERICAN
AIRLINES has secured a new year-long US$1bn
credit line to shore up liquidity, as the travel and
tourism sector reels from cancelled passenger
reservations due to the spread of the coronavirus
pandemic.
Airlines are among the corporations in most
desperate need for cash, with the International Air
Transport Association forecasting the global industry
will need up to US$200bn of state support.
Airlines are expected to borrow billions of
dollars in one-year credit facilities from their
relationship banks.
American Airlines’ US$1bn loan takes its
available liquidity to US$8.4bn. American said it
had to maintain a minimum aggregate liquidity
of US$2bn under the new credit agreement.
Low-cost carrier JetBlue’s 364-day facility
will pay 175bp over Libor and was led by Morgan
Stanley. The term loan is secured against certain
aircraft and spare engines of JetBlue. The airline
is also required to maintain unrestricted cash
and unused commitments under its revolving
credit facilities of no less than US$550m.
Such debt facilities are expected to serve as
bridges to enhanced equipment trust certificates,
which are corporate debt securities typically
issued by airlines and secured against their fleet
of planes.
UNITED AIRLINES said it raised an incremental
US$2bn term loan on March 10, while regionalcarrier SOUTHWEST AIRLINES signed and drew
down on a US$1bn 364-day term loan.
Last week, AIR CANADA announced it had
drawn down on its US$600m revolving credit
facility and is working with lenders to raise
additional liquidity over the next several weeks.
The Canadian airline, rated Ba1/BB+, said it
has cash, or cash equivalents, of US$7.1bn as of
March 13, which includes the proceeds from the
drawn revolving credit line.
The airline said it also had a C$200m
(US$136.9m) RCF that it intended to draw down
on this week.
For the second quarter of 2020, the company
said it expected flight capacity to decline by
roughly 50% versus the same period in 2019.
Travel, tourism, and ancillary industries such
as entertainment and leisure have been struck
by the pandemic, as consumers avoid travel and
large public gatherings to prevent spreading the
respiratory virus.
Air travel could reduce by up to 30% this year
as the coronavirus has caused air traffic demand
to plunge, S&P said in a report on Tuesday.
On Monday, S&P placed a slew of companies,
including American, on Negative Credit Watch,
while others, such as theme park operators
SEAWORLD and CEDAR FAIR, were downgraded.
Aeroplane manufacturer BOEING was also
lowered to BBB from A– on Monday, S&P said in
a separate report.
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