Carvana's $1 Billion Debt Exchange Spurs Stock Surge and Restructuring Bid

Carvana is offering to exchange up to $1 billion of bond principal at below-par prices as it works to restructure its debt load. The company is offering to swap five series of bonds for new secured notes due 2028 that pay 9% in cash or 12% in-kind. The debt will be secured by a second-priority claim on assets including vehicles. The exchange comes as Carvana deals with deeply distressed debt and plunging shares. The company's attempt to restructure its debt comes after a disastrous year in which it saw sales decline and losses mount to $7.61 a share.