TEMPE, AZ — Shares of Carvana Co. soared in early trading Wednesday as the Tempe-based online used car retailer announced plans to restructure $9 billion in debt and projected a narrower-than-anticipated loss in the first quarter.
Carvana (Nasdaq: CVNA) shares rose 24% early in Wednesday's trading session before leveling off and closing at $8.43, up 50 cents or 6.3%, after the company updated its first quarter guidance and announced that it's offering bondholders an option to exchange their unsecured notes for up to $1 billion in new secured bonds at a discount.
The exchange offer, if fully subscribed, would reduce the value of Carvana’s existing $5.7 billion unsecured bond debt by $1.3 billion and its annual cash interest debt by $100 million, the Financial Times reported.
The offer would also provide “noteholders with collateral while reducing Carvana’s cash interest expense and maintaining significant flexibility for the company,” Carvana said in regulatory filing with the U.S. Securities and Exchange Commission.
