Carvana announces deal to restructure debt

Carvana announced that it entered into a transaction support agreement with a group of noteholders representing over 90% of the aggregate principal amount outstanding of the company’s existing senior unsecured notes. “The strong performance of our business in 2023 presented an opportunity for an impactful and win-win transaction for Carvana and its senior unsecured noteholders,” said Mark Jenkins, Carvana’s Chief Financial Officer. “This transaction significantly increases our financial flexibility by reducing our total debt, extending maturities, and lowering near-term cash interest expense as we continue to execute our plan of driving significant profitability and returning to growth.” “Apollo is pleased to support this debt exchange agreement, which stands to significantly strengthen Carvana’s financial position while providing creditors with new first lien debt. Working with Carvana, PIMCO, Ares and the ad hoc group of noteholders, we believe this agreement demonstrates the types of win-win outcomes that companies can achieve with constructive and engaged financing partners,” said John Zito, Apollo Deputy CIO of Credit. “We continue to have strong conviction in Carvana’s strategy and Ernie Garcia’s vision to revolutionize the way consumers buy, sell, and finance their vehicles.” Agreement to eliminate more than 83% of Carvana’s 2025 and 2027 unsecured note maturities and lower required cash interest expense by over $430 million per year for the next two years. Agreement to reduce Carvana’s total debt outstanding by over $1.2 billion. New notes offered in the exchange are secured by Carvana and ADESA assets. Exchange will launch with support from Noteholders representing over 90% (~$5.2 billion) of Carvana’s senior unsecured notes.