Revamping the Road Ahead

Revamping the Road Ahead

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  • Carvana (CVNA) is offering an exchange of up to $1 billion of bond principal for new secured notes, with the debt backed by a second-priority claim on assets like vehicles. The company has five series of bonds up for grabs, including their 5.625% unsecured notes due 2025 and 10.25% unsecured notes due 2030, with the new notes paying out 9% in cash or 12% in-kind.

  • The company also announced that it had shifted its Adesa U.S. car auction business into a standalone subsidiary, a move that could set the stage for future debt issuance linked to the brand. J. Crew stirred up investor discontent after transferring its brand name and other intellectual property into a similar unit, which it then used to secure debt.

Why it matters

As Carvana struggles with debt troubles and declining stock prices, the once soaring company has seen its fortunes shift. After the pandemic drove up used car prices due to a chip shortage, the company reported a larger-than-anticipated loss in February and its lowest retail unit sales in two years.


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