(Bloomberg) — Carvana Co. has completed a debt restructuring with the majority of creditors agreeing to participate in the deal, reducing nearly $1.3 billion in debt and saving the company more than $455 million in interest costs over the next two years.
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Participating lenders swapped $5.5 billion in unsecured bonds due 2025 to 2030 for about $4.2 billion in senior secured notes due 2028 to 2031, the used car retailer said in a statement.
The company and its group of creditors – including the largest: Apollo Global Management Inc., Ares Management Corp. and Pacific Investment Management Company – announced the exchange in July. The deal is expected to reduce debt by $1.2 billion and save $430 million in annual interest expense.
Carvana in 2010 It has offered to buy back the notes that were not involved in the debt swap in 2025, and the cash offer is expected to be settled in a statement on Friday. About 80% of the holders of the 2025 notes participated in the deal, and more than 95% of the holders of the other three eligible bonds tendered their notes.
Meanwhile, S&P Global Ratings downgraded Carvana on Friday, equating the transaction to a distressed exchange due to discounted bondholders and maturity extensions. The retailer made the move due to declining liquidity and lower cash flow that the business can generate, S&P analysts said in a report.
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Carvana will restructure and repay the debt
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