Carvana Co CVNA shares are taking off Wednesday morning after the company announced private exchange offerings related to existing notes and provided an updated outlook.
What Happened: Carvana said it will offer noteholders the option to exchange unsecured notes at a premium to current trading prices for new secured notes. The company said the move would provide noteholders with collateral while reducing Carvana's cash interest expense and maintaining flexibility.
The new notes would be 9%/12% cash/PIK toggle senior secured second lien notes due 2028. The exchange offer is set to expire on April 19.
Prior to the completion of the exchange offers, Carvana also expects to complete a "series of internal corporate transactions" permitted under its existing debt arrangements.
Alongside the exchange offer announcement, Carvana issued updated guidance. For the three months ending March 31, the company expects retail units sold to come in between 76,000 and 79,000 for total net sales and operating revenue between $2.4 billion and $2.6 billion.
Carvana also expects total gross profit per unit to be in a range of $4,100 to $4,400.
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CVNA Price Action: Carvana shares were halted in early trading Wednesday.
The stock was last up 13.3% at $8.99, according to Benzinga Pro.
Photo: Tony Webster from Flickr.
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