Retiring the first priority debt with such a high coupon would normally help a stock. But Carnival at last check fell 4% to $25.02. The move could reflect profit-taking on the news.
The stock has gained 23% over the past six months on enthusiasm for economic recovery. But it has slid 17% over the past month amid concern over the stock's valuation.
Carnival issued the the notes in April 2020 to build its cash reserves, as the cruise industry ground to a halt during the COVID pandemic.
The offer for its notes pays back holders $1.1125 on the dollar. The notes traded Friday at $1.13155 and have risen to $1.14 since the tender was announced, according to Trace data.
Carnival could issue new first-priority debt to finance the buyback. That gives Carnival a big chance to lower the interest rates on its debt, given the 3.69% average yield on junk bonds, according to Bloomberg Barclays data.
Carnival said last week that it may sell up to $500 million of shares. It said in a Securities and Exchange Commission filing that it would use the funds to purchase ordinary shares of Carnival Plc, trading in the U.K., and for general purposes.
Carnival also said last month that it seeks to return all 91 of its ships to the water by next spring.