Carnival Corp. (NYSE: CCL) and the rest of the cruise line operators appear to be running for the lifeboats after their businesses may be sunk. There were concerns about each cruise ship companies being able to access the lending facilities from what will inevitably be a bailout by the U.S. government. Now it looks like they will have to raise the cash to stay alive themselves.

This industry has been one of the most battered in the stock market. The coronavirus pandemic effectively has cratered cruise brands. While the S&P 500 and Dow Jones industrial average have pulled back over 20% year to date, cruise stocks have dropped at least 75%.

Carnival stock sank lower on Wednesday morning when the company announced that it would commence a secondary offering for $1.25 billion in shares of common stock, with an overallotment option for an additional $187.5 million.

Separately, Carnival has commenced private offerings to eligible purchasers of $3 billion aggregate principal amount of first priority senior secured notes due 2023, and $1.75 billion in senior convertible notes due 2023.

At the same time, management has said that it is reducing capital expenditures and operating expenses. As a result, Carnival is suspending its dividend and the repurchase of its common stock.

Through these actions, the company expects to generate sufficient liquidity to remain in compliance with its debt covenants for the next 12 months. These debts include new lawsuits that are popping up from the Grand Princess voyage and other additional lawsuits stemming from the coronavirus.

Look out for other cruise line stocks to be making similar moves. Norwegian Cruise Line (NYSE: NCLH) and Royal Caribbean Cruises Ltd. (NYSE: RCL) are already facing lawsuits, and without a steady stream of revenue, they will have to raise cash eventually.

Carnival stock traded down more than 7% early Tuesday, at $11.87 in a 52-week range of $7.90 to $56.04. The consensus price target is $36.91. Following the announcement, the stock had been down about 15% in early trading indications.

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