Carvana has upsized and priced a $1.66 billion Senior Secured Term Loan B facility as the online automotive retailer continues to improve its capital structure, extend debt maturities, and reduce borrowing costs. The transaction represents another step in the company’s effort to strengthen its balance sheet following a period of improved operating performance and profitability.
Carvana plans to use proceeds from the new Term Loan B, together with cash on hand, to fully redeem its outstanding 9% Senior Secured Notes due in 2030. By replacing the higher-cost secured notes with the new financing, Carvana is effectively refinancing one of its nearer-term debt obligations with a longer-dated source of capital carrying a lower interest rate.
The refinancing is expected to reduce Carvana’s annual cash interest expense by approximately $45 million over each of the next four years. The transaction is being completed on a leverage-neutral basis, meaning the company is primarily replacing existing debt rather than materially increasing its overall leverage.
The Term Loan B was priced at one-month Term SOFR plus 225 basis points and was issued at 99.75% of its principal amount. The loan will mature seven years after closing, giving Carvana additional runway before the debt comes due and further extending the company’s overall maturity profile.
Carvana said the financing builds on substantial improvements in its financial position over the past several years. The company has reported 10 consecutive quarters characterized by strong growth and profitability improvements, while also taking a series of actions designed to optimize its capital structure.
As of the second quarter of 2026, Carvana’s net debt to trailing 12-month Adjusted EBITDA ratio stood at 1.0x. The company said its recent performance and balance-sheet initiatives have resulted in what it considers its strongest financial position to date.
The lower interest expense generated by the refinancing could also provide Carvana with additional financial flexibility as it continues investing in its national vehicle retail and logistics infrastructure. Reducing financing costs allows a greater portion of operating cash flow to remain available for other corporate priorities.
Carvana operates an e-commerce platform that enables customers to shop for, finance, purchase, trade in, and sell vehicles online, with delivery and local pickup options. Since launching in 2013, more than 4 million customers have used Carvana’s platform, making the company one of the largest online automotive retailers in the U.S.
