Carvana gives results of exchange offers, tender offer, consent bids for five series of notes

By Mary-Katherine Stinson

Lexington, Ky., Aug. 31 – Carvana Co. announced the expiration and results of its exchange offers and concurrent cash offer, according to a press release.

The company was offering noteholders the option to exchange their unsecured notes under four series for new secured notes that would provide exchanging noteholders with collateral while reducing the company’s cash interest expense and total debt and maintaining significant flexibility for the company.

As previously announced, holders of more than 90% of Carvana’s unsecured notes previously committed to participate in this transaction.

Carvana was also conducting a separate tender offer for another series of existing notes and soliciting consents from holders to adopt proposed amendments affecting all five series of existing notes.

Each offer and consent solicitation expired at 5 p.m. ET on Aug. 30.

Tender offer

As previously reported, concurrently with, but separately from, the exchange offers, the company was conducting a $425 million cash offer to purchase any and all of its $500 million outstanding 5 5/8% senior notes due 2025.

As of the expiration of the offer, $401,742,000, or 80.3%, of the notes were tendered and accepted for purchase.

The company was offering to purchase the 2025 notes at a purchase price of $850.00 per $1,000 principal amount, plus accrued interest.

The consideration includes a consideration for consents delivered under the concurrent related consent solicitation.

The cash tender offer will be funded with cash from the company’s balance sheet or proceeds from sales under its “at-the-market offering” program or other equity offerings.

Exchange offers

Carvana was conducting exchange offers for its $600 million outstanding 5½% senior notes due 2027 (Cusip: 146869AF9, U1468GAE4), $600 million outstanding 5 7/8% senior notes due 2028 (Cusip: 146869AD4, U1468GAD6), $750 million outstanding 4 7/8% senior notes due 2029 (Cusip: 146869AH5, U1468GAF1) and $3,275,000,000 outstanding 10¼% senior notes due 2030 (Cusip: 146869AJ1, U1468GAG9) for new secured notes.

Specifically, the company was offering to exchange the existing unsecured notes for up to an aggregate principal amount of $4,275,000,000 of the following three tranches of senior secured notes: up to $1 billion of new 9%/12% cash/PIK senior secured notes due 2028; up to $1.5 billion of new 11%/13% sash/PIK senior secured notes due 2030; and up to $1,775,000,000 of new 9%/14% cash/PIK senior secured notes due 2031.

The final results are as follows:

• $568,165,000, or 94.7%, of the $600 million outstanding 5½% senior notes due 2027 were tendered and accepted for exchange;

• $577,527,000, or 96.3%, of the $600 million outstanding 5 7/8% senior notes due 2028 were tendered and accepted for exchange;

• $724,349,000, or 96.6%, of the $750 million outstanding 4 7/8% senior notes due 2029 were tendered and accepted for exchange; and

• $3,247,959,000, or 99.2%, of the 3,275,000,000 outstanding 10¼% senior notes due 2030 were tendered and accepted for exchange.

As previously reported, the exchange considerations per $1,000 principal amount of existing notes, which include consideration for consents delivered under the concurrent consent solicitations, are as follows:

• For the 2027 notes, $767.38 principal amount of new secured notes, consisting of $179.50514698 of the new 2028 notes, $269.25772047 of the new 2030 notes and $318.62163589 of new 2031 notes;

• For the 2028 notes, $668.00 principal amount of new secured notes, consisting of $156.25775909 of new 2028 notes, $234.38663864 of new 2030 notes and $277.35752239 of new 2031 notes;

• For the 2029 notes, $650.08 principal amount of new secured notes, consisting of $152.06440115 of new 2028 notes, $228.09660172 of new 2030 notes and $269.91431204 of new 2031 notes; and

• For the 2030 notes, $893.50 principal amount of new secured notes, consisting of $209.00578794 of new 2028 notes, $313.50868191 of new 2030 notes and $370.98527359 of new 2031 notes.

Consent solicitations

Simultaneously with the exchange or tender offers for each series of existing notes, the company was soliciting consents from holders to adopt some proposed amendments to the indentures governing the existing notes.

The company reported that it received the required consents to the proposed amendments for each series of existing notes, approving the elimination of substantially all of the restrictive covenants as well as some events of default and related provisions.

For each series, the proposed amendments required the consents of holders of a majority in aggregate principal amount of that series.

Any holder who tendered existing notes under an exchange offer or the tender offer was required to deliver a corresponding consent to all of the proposed amendments for that series in the related consent solicitation.

Holders could not deliver consents without tendering their notes.

Details

Settlement will occur within five business days following the expiration time.

The offers and consent solicitations were subject to conditions. However, no offer was conditioned upon the consummation of any other offer or consent solicitation.

The company did not offer withdrawal or revocation rights in connection with any of the offers or consent solicitations.

D.F. King & Co., Inc. is the exchange agent and information agent (800 967-5079 or 212 269-5550).

Carvana is a Tempe, Ariz.-based used automotive online retailer.

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