Debt28 Jan 2026 10:42
I read the other day that CCL had already paid off $10b of debt but after doing some digging, it feels like the truth has been bent.
Have Carnival paid off a lot of debt? Technically yes.. but it's been done under a refinancing playbook, so whilst the headline looks great, it's not what it seems when you zoom out.
At our 2022 peak we had $31.9B debt, up from $9.7b pre-covid levels. Since then, according to AI, we've paid off $6.9b, but let's use the $10b being floated about by the media for dramatic affect. So, we should only have $21.98b of debt now, right? And we should be all paid up by 2035 (ish). Hooray!
But... according to most recent figures, we've just robbed Peter to pay Paul. Sure our interest rate is more favourable and we're making positive steps, but in reality today's debt is still $28.4b! That's a real reduction of $3-4b from our peak and less than half of the $10 I'm reading about.
This gives us an actual repayment of $1.7-$2b repayment per year... an 18-22 year trajectory for full repayment, or even mid/late 2030's to get back to pre-covid debt levels. Some of us could be dribbling food down our chins in nursing home by 2042 and if there's another black swan, or recession, or a war... more debt will be the only answer.
My chat with AI about this investment concludes a:
Best case: 18-22 years.
Optimistic: 12-15 years.
Pessimistic: 25+ years.
Whilst some of this will feel good on paper, because of inflation (print baby print), the actual return on investment is unlikely to be positive for LTHs.
AI often leads me down a false path and I know some of you know this stock and industry way better than me, so I thought I'd share these findings to see if you can make it make sense for me :)
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