Carnival Refinances More Debt, NRG Energy Deal, Cigna Drops

On this episode of Stock Movers:

- Carnival Corp. (CCL) shares are up. The company is issuing bonds for the third time this year, as the cruise operator chips away at a debt load that had ballooned during the Covid-19 pandemic. Monday’s $1 billion offering of senior unsecured notes will be used to refinance 7.625% notes maturing next year, according to a person familiar with the matter. Pricing for the new notes is being discussed in the 5.875% to 6% range, the person said.

- NRG Energy (NRG) shares hit an all time high as the company agreed to acquire a fleet of natural gas-fired power plants from LS Power Equity Advisors LLC for about $12 billion including debt, betting the fuel will be crucial to meet electricity demand from data centers. The cash-and-stock deal calls for NRG to buy 18 gas-fired facilities from LS with a combined capacity of about 13 gigawatts, the companies said Monday in a statement. That’s enough to power about 10.4 million homes.

- Cigna (CI) and other US health-care companies that own pharmacy-benefit management units are trading lower on Monday after President Donald Trump proposed a plan to “cut out” the drug-industry middlemen as a way to reduce drug costs. Meantime, House Republicans are reviving measures that would primarily prohibit “spread pricing” in the Medicaid safety net program -- where pharmacy benefit managers profit by paying pharmacies less than what they charge state Medicaid plans for a medication.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.

Speaker 2 (00:08):
The Stock Movers podcast, your roundup of companies making moves
in the stock market, harnessing the power of Bloomberg Data.

Speaker 3 (00:18):
Let's take a look at some stocks on the move
this week.

Speaker 4 (00:20):
I am Carol Master along with Matt Miller with us
as Christina Quino, Managing editor for Bloomberg Markets Live Blog.

Speaker 3 (00:25):
Let's start with Carnival.

Speaker 1 (00:28):
Carnival, Yeah, that stock is up more than nine percent
at the moment, and is because it's selling bonds for
the third time this year, a billion dollars of senior
unsecured notes, and proceeds of that will be used to
refinance its debt maturing next year.

Speaker 3 (00:43):
As you may.

Speaker 1 (00:43):
Recall, the chief financial officer, Dervid Bernstein, was saying that
paying down debt was quote priority one, two and three
their most recent earnings calls. So investors really appreciating that
they're able to do this at a particular time when
the rally in risk assets is really benefiting a man
for this sort of debt.

Speaker 3 (01:01):
We're talking about the cruise lines, yes, inmndible, these lines. Yeah.

Speaker 4 (01:05):
I think what's interesting is man, they did take on
a lot of debt during the pandemic.

Speaker 3 (01:10):
We saw that in a big way. And I know Fitch,
you know.

Speaker 4 (01:12):
Pointing out that it's expected to decline to what twenty
seven billion at the end of this year from thirty
six billion in twenty twenty two.

Speaker 3 (01:19):
That has been priority.

Speaker 4 (01:20):
Wanted to talk a lot with the CEO of that company,
and that has certainly been a priority for them. But
in the meantime, you know, their business looks pretty good.
I mean, they're very upbeat about people wanting to take,
you know, get on a cruise ship.

Speaker 3 (01:33):
Still, yeah, yeah, in a big way. What are the
other stocks you're looking at? And I'm key RG incredible
deal today.

Speaker 5 (01:40):
I want to say, like just five minutes into the trade,
they were up twenty five percent and those.

Speaker 1 (01:45):
Guys haven't really let up at the moment more than
twenty four percent and we're late into the day in trading.
So yeah, a lot of investors really really liking that deal.
Just a reminder, you know, they're they're agreeing to buy
a fleet of natural gas fired power plants for about
twelve billion dollars.

Speaker 3 (02:01):
This is essentially an AI bet right because they're.

Speaker 1 (02:03):
Betting that the fuel will be crucial to meet the
electricity demand from data centers. That's still a really hot
part of the AI sector at the moment. And you
know with this purchase energy also saying that it's adjusted
earnings per share will now expand at fourteen percent on
a compound annual growth rate over five years, up from
previously ten percent. So yeah, substantial gain there, and you

(02:25):
can see what OSCCA is really soaring today.

Speaker 4 (02:27):
Can I just say one of the big things at
Milican too was the AI data center.

Speaker 3 (02:31):
People said, yep, they're still spending. They're spending like crazy there, right,
because so Mira Panda today.

Speaker 5 (02:36):
She was fantastic on Bloomberg Surveillance was saying that companies
outside of megacap tech docs, outside of the AI spend
are not boosting capex but rather buying shares back. So
I thought that was really interesting. Everyone else you have
to pay for your data center, but everything else is optional,

(02:59):
and maybe a CFO is going to prefer to buy.

Speaker 4 (03:02):
Shares, right if you have to make difference, race or
make or make choices energy. By the way, the number
one gainer in the S and P five hundred signa
going to the other direction.

Speaker 1 (03:09):
Signa exactly one of the sauces that is in red
at the moment, down more than six percent. And that's
after President Donald Trump's book earlier proposing his plan to
cut out the drug industry middlemen as a way to
reduce drug costs. A very interesting right in the President's
executive order, focusing not so much on the makers of
these drugs, but the middlemen involved in the process of

(03:32):
selling them and getting them to the public.

Speaker 4 (03:33):
And so now we're negotiating the pricing exactly a big
part of write what they do, and as.

Speaker 1 (03:38):
Part of what has Republicans are going to be trying
to do the reviving measures that would primarily prohibit spread pricing,
which is essentially pharmacy benefit manager's profiting by paying pharmacies
less than what they charged state medicaid plans for medication.

Speaker 3 (03:53):
So, you know, this was.

Speaker 1 (03:54):
Something that was considered by Congress last year, ultimately didn't pass,
but maybe now with renewed efforts behind it, with a
president throwing his weight behind it, possibly getting it undershot there.

Speaker 5 (04:04):
And that's why we see CBS down as well. I'm
siging on CBS to the biggest losers on the S
and P. If you sort it by percentage terms.

Speaker 1 (04:12):
You know.

Speaker 5 (04:12):
When Dave Rix, who's the CEO of Eli Lillyeah, was
on with David Rubinstein, he was saying the same thing, like,
it's not us man, it's the middleman, you know. And
Trump today also was referring to this magical mini middleman
who's such a great businessman and makes so much money.

Speaker 3 (04:29):
I guess these are the middleman. All I know is
you go to pick up a prescription or something and
then it's like there's a.

Speaker 4 (04:35):
Keep one on this, and there's a deal on this,
and it's like, I never it's just kind of it's
too much.

Speaker 5 (04:40):
For when I lived in Germany, I just moved back
here in twenty twenty two. I would go to get
my medicine at the pharmacy and they would say seven
euros and twenty four cents and I would say, is
there some mistake? Can I not please pay you another
few hundred euros? And no, that's just how much it was.
So they did something right, we did something wrong. It's

(05:02):
like a bunch of friends going out to dinner and
we buy every single time.

Speaker 2 (05:07):
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