S&P raises Carvana credit rating to ‘CCC+’ with negative outlook

S&P Global Ratings raised its issuer credit rating on the company to “CCC+” from “D.” Carvana completed its debt restructuring, swapping its senior unsecured notes for a reduced amount of longer-dated senior secured notes, S&P said in a statement. This reduced Carvana’s debt burden and temporarily improved liquidity, the agency added. It says the upgrade reflects the near-term improvement in the company’s liquidity position, but adds Carvana’s “capital structure remains unsustainable.” S&P believes the company’s liquidity improvement is only temporary and its liquidity will come under pressure once the payment-in-kind debt converts to cash interest in two years. As such, it has a negative outlook on the company.