White & Case advises ad hoc group of Carvana creditors on successful US$5.7 billion debt exchange and related liability management transactions

Global law firm White & Case LLP has advised an ad hoc group of unsecured noteholders of Carvana Co. ("Carvana") on a successful series of liability management transactions, including US$5.7 billion debt exchange offers, a concurrent cash tender offer (together with the debt exchange offers, the "Offers"), an at-the-market equity raise, an equity investment from Carvana's founders and a solicitation of consents to certain amendments to Carvana's existing indentures. Noteholders representing more than 96 percent of the aggregate principal amount outstanding of Carvana's existing senior unsecured notes participated in the Offers, which settled on September 1, 2023, driven by the ad hoc group represented by White & Case that was party to a transaction support agreement with Carvana. 

In the Offers, noteholders had the opportunity to (i) exchange their outstanding 5.500% Senior Notes due 2027, 5.875% Senior Notes due 2028, 4.875% Senior Notes due 2029 and 10.250% Senior Notes due 2030 for three tranches of new senior secured notes: 9.0% / 12.0% cash / PIK toggle senior secured notes due 2028, 11.0% / 13.0% cash / PIK toggle senior secured notes due 2030 and 9.0% / 14.0% cash / PIK toggle senior secured notes due 2031 and (ii) tender their outstanding 5.625% Senior Notes due 2025 for cash.

The highly successful liability management transactions provide significant financial and operational flexibility to Carvana by reducing its total debt, extending maturities and lowering near-term cash interest expense, and demonstrate a model for a "win-win" outcome that can be achieved through constructive engagement by borrowers with their creditor and other stakeholder constituencies.

The White & Case team was led by Financial Restructuring and Insolvency partners Thomas Lauria (Miami), Rob Bennett, Harrison Denman (both in New York) and Charles Koster (Houston); Capital Markets partners Jonathan Michels, Andrew Weisberg, David Thatch (all in New York) and A.J. Ericksen (Houston); M&A partner Gregory Pryor (New York); and Tax partner David Dreier (New York). The team also included Debt Finance counsel Kyle Bady and associates Sophia Berger (both in Miami) and Iris Ma (Silicon Valley); Financial Restructuring and Insolvency associates Andrea Amulic and Andrew Costello (both in New York); and Capital Markets associates Abigail Simon, Jake Lee, Adrian Ling and Nicholas Nosce (all in New York).

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