Like the ballast that can stabilize a ship, debt can help a company sail smoothly through rough waters. But too much of either and both ship and company can capsize. 

Cruise ship operator Carnival (NYSE:CCL) is trying to thread the needle between having too much debt and just enough to stay afloat during the pandemic until its ships can leave port again.

Bloomberg reports Carnival is cruising back into the debt markets, looking to add another billion dollars to the $14.9 billion it already carries below decks, almost half of which was added just this year.

Cruise ship at sunrise

Image source: Getty Images.

Trying to run a tight ship

Carnival wants to tap international investors to raise money to stay afloat until its ships can begin sailing again in August. AIDA will be the first of the cruise ship operator's brands to resume operations with three ships sailing from ports in Germany, but Carnival has also announced it is removing ship capacity from its fleet and is delaying the delivery of new ships.

The cruise line says it has reduced operating costs by $7 billion on an annualized basis and reduced capital expenditures by more than $5 billion over the next 18 months, but it is still taking on water.

Potential investors are looking at some steep interest rates to back Carnival, according to Bloomberg, suggesting yields of 10.5% on the euro portion of the debt and 11% on the dollar portion.

It notes that is only slightly better than the 11.9% yield Carnival offers on its bond offering in April. The cruise ship operator has raised nearly $7 billion in debt since the pandemic began.