• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / Stocks

After a Wedding Dress Chuckle, a Return to Sobering Reality

The news out of the mortgage markets and cruise line business offers nothing to laugh about.
By JONATHAN HELLER
Apr 03, 2020 | 10:00 AM EDT
Stocks quotes in this article: CCL

I've been looking for a bit of humor as the coronavirus crisis has taken many of us hostage and found some on Thursday.

Bored and with her 25th anniversary coming up, a friend of my wife decided to see if she could still fit into her wedding dress. She intended to wear it for her husband on that monumental day. The dress had been put away in a box right after their wedding and had been carefully preserved, unseen, in darkness since the big day.

When she opened it, much to her surprise, it was someone else's dress, someone much shorter. All the care that went into preserving it was for naught, but it gave her a laugh in trying times. In addition, someone else will get a big surprise if and when she goes to take a look at her own dress.

Now for something a bit more sobering I learned that is happening in the mortgage markets as I talked with a mortgage broker on Thursday. While rates are incredibly low, the markets themselves are in a bit of turmoil, and getting a loan or refinancing may be more difficult than you might imagine.

It seems no one is writing jumbo loans. In addition, minimum credit scores for FHA loans have increased. The broker's head was absolutely spinning as he was witness to more fallout from the spigot of normal economic life being turned off. Somehow, we've got to reopen what we can as soon as possible while keeping people safe, a tall order for sure.

Meanwhile, things in the cruise industry just got a bit more interesting as Carnival Corp. (CCL) took bold steps to raise capital. The company priced a secondary stock offering of 62.5 million shares at $8 a share in order to raise $500 million; that figure was down from an initial announcement of plans to raise $1.25 billion. In addition, Carnival priced $5.75 billion in debt, including $4 billion in 11.5% senior secured notes maturing in 2023 and $1.75 billion in senior convertible notes maturing the same year. Imagine that -- 3-year paper at 11.5%. But that's where we are in this environment.

The initial word that comes to mind here is "dilution," which will occur from the sale of the stock and potentially from the convertible notes, but that's the least of the Carnival's worries at this point. Like the other cruise lines, Carnival needs to resume service and entice passengers to come back against the backdrop of the two Holland America ships containing sick passengers that finally were able to dock Thursday in Florida. By the way, the new debt offering will put Carnival's total amount of debt due by 2023 at just under $14 billion. It should not be an issue for the company, assuming the industry gets back to normal soon.

Yet I still can hardly believe it; CCL was a $50 stock just three months ago, a healthy company that now can only fetch $8 a share for its stock and is paying 11.5% for 3-year paper in order to stay afloat.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Heller had no positions in the stocks mentioned.

TAGS: Investing | Stocks | Housing Market | Construction & Engineering | Transportation | Real Money | Consumer Discretionary | Coronavirus

More from Stocks

This Market Might Make Your Head Spin

James "Rev Shark" DePorre
Mar 8, 2021 4:40 PM EST

The rotation out of technology and into 'reopening' plays is driving the deceptive action.

'F' Is for $14

Mark Sebastian
Mar 8, 2021 2:53 PM EST

Ford as some serious FOMO behind it.

I Wouldn't Be Surprised if Palantir Technologies Worked Lower in the Weeks Ahead

Bruce Kamich
Mar 8, 2021 2:40 PM EST

Making recommendations about stocks that are thinly traded or are new issues is always a little 'dicey'.

How Does Dick's Sporting Goods Look Before the 'Big Game'?

Bruce Kamich
Mar 8, 2021 2:05 PM EST

Let take a look at the charts ahead of Tuesday's earnings release.

I'm Not Blowing Smoke With This 'Boring' Trade

Timothy Collins
Mar 8, 2021 1:46 PM EST

Given the rotation away from tech and growth, look for the market to at least make an effort at a breakout push here, taking PM with it.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 11:38 AM EST GARY BERMAN

    The INDU and DIA

    FIBOCALL: The INDU index and the DIA The INDU ...
  • 10:44 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "The Challenge of Short-Selling"
  • 08:40 AM EST PAUL PRICE

    Recent Pick SpartanNash (SPTN) Raised Its Quarterly Payout by 3.9%

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login