8-KMaterial AgreementsExhibits & Filings

CARVANA CO. 8-K Report, Material Agreement (May 24, 2019)

Filed May 24, 2019For Securities:CVNA

Summary

Carvana Co. (CVNA) filed an 8-K on May 24, 2019, to report the issuance of $250.0 million in aggregate principal amount of 8.875% Senior Notes due 2023. These "New Notes" are being issued as additional notes under an existing indenture and will be treated as fungible with the previously issued $350.0 million in "Existing Notes", bringing the total aggregate principal amount of these senior notes to $600.0 million. This move signifies Carvana's continued access to debt markets to fund its operations and growth. Investors should note that the company is increasing its leverage. The filing also references the issuance of up to 4,830,000 shares of Class A common stock, indicating a concurrent equity offering. This dual financing strategy aims to provide Carvana with the capital necessary to support its expansion in the used car market.

Key Highlights

  • 1Carvana Co. issued an additional $250.0 million of 8.875% Senior Notes due 2023.
  • 2These new notes are fungible with the existing $350.0 million of the same notes, bringing the total outstanding senior notes to $600.0 million.
  • 3The issuance was made under a First Supplemental Indenture, supplementing the original indenture dated September 21, 2018.
  • 4This debt issuance indicates Carvana's ongoing need for capital, likely to fund growth initiatives and operations.
  • 5The filing references an accompanying equity offering of up to 4,830,000 shares of Class A common stock.
  • 6The company is increasing its overall debt burden through this note issuance.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report Carvana Co.'s entry into a material definitive agreement, specifically the issuance of $250.0 million in aggregate principal amount of 8.875% Senior Notes due 2023.

The new notes are issued as "additional notes" under an existing indenture and will trade fungibly with the previously issued $350.0 million of the same notes. This means they will be treated as part of the same series, bringing the total aggregate principal amount of these senior notes to $600.0 million.

The issuance of both debt and equity suggests Carvana is actively seeking capital to fund its growth and operations. The debt issuance increases leverage, while the equity offering dilutes existing shareholders but provides additional funds. This dual approach is common for growth-stage companies needing significant capital.

The new notes carry an interest rate of 8.875% and mature in 2023, consistent with the terms of the previously issued senior notes.