CARVANA CO.CVNA
CARVANA CO. Debt Disclosure
NOTE 9 — DEBT INSTRUMENTS
Debt instruments, excluding finance leases, which are discussed in Note 15 — Leases, as of December 31, 2025 and 2024 consisted of the following:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Asset-based financing: | |||||||||||
| Floor plan facility | $ | 58 | $ | 67 | |||||||
Financing of beneficial interests in securitizations | 374 | 354 | |||||||||
| Real estate financing | 485 | 485 | |||||||||
Transportation fleet financing | 23 | — | |||||||||
| Total asset-based financing | 940 | 906 | |||||||||
Senior Secured Notes (1) | 3,929 | 4,358 | |||||||||
Senior Unsecured Notes | 107 | 205 | |||||||||
| Total debt | 4,976 | 5,469 | |||||||||
| Less: current portion | (211) | (302) | |||||||||
Less: unamortized debt issuance costs (2) | (36) | (46) | |||||||||
Plus: unamortized premium (3) | 18 | 27 | |||||||||
| Total included in long-term debt, net | $ | 4,747 | $ | 5,148 | |||||||
(1) Includes zero and $105 million of accrued paid-in-kind ("PIK") interest as of December 31, 2025 and 2024, respectively. Accrued PIK interest increases the principal amount of Senior Secured Notes on each semi-annual interest payment date.
(2) The unamortized debt issuance costs related to long-term debt are presented as a reduction of the carrying amount of the corresponding liabilities on the accompanying consolidated balance sheets. Unamortized debt issuance costs related to revolving debt arrangements are presented within other assets on the accompanying consolidated balance sheets and not included here.
(3) The unamortized premium relates to a portion of the notes exchange offers completed in September 2023 which were accounted for as a debt modification.
Short-Term Revolving Facilities
Floor Plan Facility
The Company previously entered into a floor plan facility with Ally to finance its vehicle inventory, which was secured by Carvana LLC's vehicle inventory, general intangibles, accounts receivable, and finance receivables (as amended, the "Floor Plan Facility"). On September 1, 2023, the Company amended the Floor Plan Facility in connection with the issuance of the Senior Secured Notes (as defined below) to provide for an additional exclusive grant of collateral over certain deposit accounts and the cash on deposit in those accounts in favor of the lender and to amend certain other affirmative and negative covenants.
The Company further amended the Floor Plan Facility on April 29, 2025 to renew the line of credit at $1.5 billion until April 30, 2027. Under the amendment, the interest rate on the Floor Plan Facility was reduced to (i) a prime rate minus 0.70% when amounts drawn under the Floor Plan Facility are less than 25% of the then current inventory balance, (ii) a prime rate minus 0.50% when amounts drawn under the Floor Plan Facility are 25% or more but less than 50% of the then current inventory balance, or (iii) a prime rate plus 0.10% when amounts drawn under the Floor Plan Facility are 50% or more of the then current inventory balance. The Floor Plan Facility also requires monthly interest payments and restricted cash requirements on a sliding scale whereby at least 5% of the total principal amount owed to the lender is required to be held as restricted cash if amounts drawn are under 25% of the then current inventory balance, increasing to 12.5% to be held as restricted cash if amounts drawn are between 25% and 49.99% of the then current inventory balance, and further increasing to 25% to be held as restricted cash if amounts drawn are equal to or greater than 50% of the then current inventory balance. The Company is also required to pay the lender an availability fee based on the average unused capacity during the prior calendar quarter under the amended Floor Plan Facility.
As of December 31, 2025, the Company had $58 million outstanding under the Floor Plan Facility, unused capacity of $1.4 billion, and held $3 million in restricted cash related to the Floor Plan Facility. During the year ended December 31, 2025, the Company's effective interest rate on the Floor Plan Facility was 5.77%.
As of December 31, 2024, the Company had $67 million outstanding under the Floor Plan Facility, unused capacity of $1.4 billion, and held $8 million in restricted cash related to the Floor Plan Facility. During the year ended December 31, 2024, the Company's effective interest rate on the Floor Plan Facility was 6.85%.
Finance Receivable Facilities
The Company has various short-term revolving credit facilities to fund certain finance receivables originated by the Company prior to selling them, which are typically secured by the finance receivables pledged to them (the "Finance Receivable Facilities").
In January 2020, the Company entered into an agreement pursuant to which a lender agreed to provide a revolving credit facility to fund certain finance receivables originated by the Company. In 2023, the Company amended its agreement to, among other things, adjust the line of credit to $500 million, and in January 2025, the maturity date was extended to April 15, 2026.
In February 2020, the Company entered into an agreement pursuant to which a second lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. In December 2021, the Company amended its agreement to, among other things, increase the line of credit to $600 million and in November 2025, the maturity date was extended to November 24, 2027.
In April 2021, the Company entered into an agreement pursuant to which a third lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. In December 2021, the Company amended its agreement to, among other things, increase this line of credit to $600 million, and in October 2025 the maturity date was extended to October 9, 2026.
In March 2022, the Company entered into an agreement pursuant to which a fourth lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. In August 2025, the Company amended its agreement to, among other things, increase the line of credit to $600 million and extend the maturity date to August 6, 2026.
In May 2023, the Company entered into an agreement pursuant to which a fifth lender agreed to provide a $500 million revolving credit facility to fund certain finance receivables originated by the Company. In August 2025, the Company amended its agreement to, among other things, increase the line of credit to $600 million and extend the maturity date to February 14, 2027.
In September 2025, the Company entered into an agreement pursuant to which a sixth lender agreed to provide a $600 million revolving credit facility to fund certain finance receivables originated by the Company until March 29, 2027.
The Finance Receivable Facilities require that any undistributed amounts collected on the pledged finance receivables be held as restricted cash. The Finance Receivable Facilities require monthly payments of interest and fees based on usage and unused facility amounts. The Finance Receivable Facilities self-amortize from the end of the draw period until maturity, offer full prepayment rights, and have no credit sublimits or aging restrictions, subject to negotiated concentration limits. The subsidiaries that entered into these Finance Receivable Facilities are each wholly-owned, special purpose entities whose assets are not available to the general creditors of the Company. As of December 31, 2025 and 2024, the Company had zero outstanding under these Finance Receivable Facilities each period, unused capacity of $3.5 billion and $2.7 billion, respectively, and held $2 million each period in restricted cash related to these Finance Receivable Facilities. During the years ended December 31, 2025 and 2024, the Company's effective interest rate on these Finance Receivable Facilities was 5.64% and 7.39%.
Long-Term Debt
Senior Secured Notes
The Company has issued various tranches of Senior Secured Notes (collectively, the "Senior Secured Notes") as further described below:
| Senior Secured Notes | December 31, 2025 | December 31, 2024 | Year 1 PIK Interest Rate | Year 2 Cash/PIK Toggle Interest Rate | Thereafter Cash Interest Rate | ||||||||||||||||||||||||
| (in millions, except percentages) | |||||||||||||||||||||||||||||
Notes due December 1, 2028 (the "2028 Senior Secured Notes") | $ | — | $ | 611 | 12% | 9%/12% | 9% | ||||||||||||||||||||||
Notes due June 1, 2030 (the "2030 Senior Secured Notes") | 1,660 | 1,660 | 13% | 11%/13% | 9% | ||||||||||||||||||||||||
Notes due June 1, 2031 (the "2031 Senior Secured Notes") | 2,269 | 1,982 | 14% | --/14% | 9% | ||||||||||||||||||||||||
Accrued PIK interest | — | 105 | |||||||||||||||||||||||||||
| Total principal amount | $ | 3,929 | $ | 4,358 | |||||||||||||||||||||||||
Less: unamortized debt issuance costs | (29) | (40) | |||||||||||||||||||||||||||
Plus: unamortized premium | 18 | 27 | |||||||||||||||||||||||||||
Total Senior Secured debt | $ | 3,918 | $ | 4,345 | |||||||||||||||||||||||||
Interest on each of the Senior Secured Notes is payable semi-annually on February 15 and August 15, and commenced on February 15, 2024. On February 15, 2025, the Company paid interest for the 2028 and 2030 Senior Secured Notes in cash of $28 million and $91 million, respectively, and as required by the indentures governing the Senior Secured Notes, and increased the principal amount of the 2031 Senior Secured Notes in connection with the payment of interest in kind of $139 million. On August 15, 2025, the Company paid interest for the 2028 and 2030 Senior Secured Notes in cash of $25 million and $91 million, respectively, and as required by the indentures governing the Senior Secured Notes, increased the principal amount of the 2031 Senior Secured Notes in connection with the payment of interest in kind of $148 million. Accrued cash interest expense on the 2028 Senior Secured Notes, the 2030 Senior Secured Notes, and the 2031 Senior Secured Notes is included in accounts payable and accrued liabilities in the accompanying consolidated balance sheets.
On February 15, 2024 and as required by the indentures governing the Senior Secured Notes, the Company increased the principal amount of the 2028, 2030, and 2031 Senior Secured Notes in connection with the payment of interest in kind of $53 million, $88 million, and $111 million, respectively. Further, on August 15, 2024, as required by the indentures governing the Senior Secured Notes, the Company increased the principal amount of the 2028, 2030, and 2031 Senior Secured Notes in connection with the payment of interest in kind of $47 million, $101 million, and $130 million, respectively.
During the year ended December 31, 2025, as permitted by the indenture governing the 2028 Senior Secured Notes, the Company voluntarily redeemed $559 million of principal amount of the 2028 Senior Secured Notes for $578 million, which included $13 million of premium and $6 million of accrued interest. Additionally, during the year ended December 31, 2025, the Company repurchased $52 million of principal amount of the 2028 Senior Secured Notes in the open market for $55 million, which included less than $1 million of accrued interest. The repurchased and redeemed notes were cancelled upon receipt. The repurchases and redemption are treated as an extinguishment of debt, with any realized discount (premium) recognized as a gain (loss) on debt extinguishment in the accompanying consolidated statements of operations, net of transaction fees and write-offs of related unamortized debt issuance costs and unamortized premium. As a result of the repurchases and redemption, during the year ended December 31, 2025, the Company recognized a net loss on debt extinguishment of $16 million which included $1 million of transaction fees and write-offs of related unamortized debt issuance costs and unamortized premium.
During the year ended December 31, 2024, as permitted by the indenture governing the 2028 Senior Secured Notes, the Company repurchased $370 million of principal amount of the 2028 Senior Secured Notes in the open market for $384 million which included $8 million of accrued interest. Additionally, during the year ended December 31, 2024, the Company redeemed
$100 million of principal amount of the 2028 Senior Secured Notes for $108 million which included $3 million of accrued interest. The repurchased and redeemed notes were cancelled upon receipt. The repurchases and redemption are treated as an extinguishment of debt, with any realized discount (premium) recognized as a gain (loss) on debt extinguishment in the accompanying consolidated statements of operations, net of transaction fees and write-offs of related unamortized debt issuance costs and unamortized premium. As a result of the repurchases and redemption, during the year ended December 31, 2024, the Company recognized a net loss on debt extinguishment of $12 million which included $2 million of transaction fees and write-offs of related unamortized debt issuance costs and unamortized premium.
The Company may redeem some or all of its 2031 Senior Secured Notes at any time prior to August 15, 2028 (the "Secured Early Redemption Date") at 100% of the principal amount outstanding plus applicable make-whole premiums set forth in each respective indenture, plus any accrued and unpaid interest to the redemption date. The Company may also redeem its Senior Secured Notes (on or after the Secured Early Redemption Date, with regard to the 2031 Senior Secured Notes) in whole or in part at redemption prices set forth in each respective indenture, plus accrued and unpaid interest up to but excluding the redemption date. If the Company experiences certain change of control events, it must make an offer to purchase all of the Senior Secured Notes at 101% of the principal amount thereof, plus any accrued and unpaid interest, to the repurchase date.
The Senior Secured Notes mature as specified in the table above unless earlier repurchased or redeemed and are fully and unconditionally guaranteed on a senior secured basis, jointly and severally, by all of the domestic restricted subsidiaries of the Company (other than, subject to certain exceptions, any subsidiary that constitutes an "immaterial subsidiary," "captive insurance subsidiary," "securitization subsidiary" or "permitted joint venture"). The Senior Secured Notes and the guarantees are secured by (i) second-priority liens on certain assets and property of the Company, pledged in favor of the Ally Parties under the Floor Plan Facility and (ii) first-priority liens on certain assets and property of the Company and the guarantors, as identified in the indentures to the Senior Secured Notes.
The indentures to the Senior Secured Notes contain restrictive covenants that limit the ability of the Company and its restricted subsidiaries to, among other things and subject to certain exceptions, incur additional debt or issue preferred stock, create new liens, create restrictions on intercompany payments, pay dividends and make other distributions in respect of the Company's capital stock, redeem or repurchase the Company’s capital stock or prepay subordinated indebtedness, make certain investments or certain other restricted payments, guarantee indebtedness, designate unrestricted subsidiaries, sell certain kinds of assets, enter into certain types of transactions with affiliates, and effect mergers or consolidations.
Senior Unsecured Notes
The Company has issued various tranches of Senior Unsecured Notes (the "Senior Unsecured Notes") each under a separate indenture, as further described below:
Senior Unsecured Notes | December 31, 2025 | December 31, 2024 | Interest Rate | ||||||||||||||
| (in millions, except percentages) | |||||||||||||||||
Notes due October 1, 2025 ("2025 Senior Unsecured Notes") | $ | — | $ | 98 | 5.625 | % | |||||||||||
Notes due April 15, 2027 ("2027 Senior Unsecured Notes") | 32 | 32 | 5.500 | % | |||||||||||||
Notes due October 1, 2028 ("2028 Senior Unsecured Notes") | 22 | 22 | 5.875 | % | |||||||||||||
Notes due September 1, 2029 ("2029 Senior Unsecured Notes") | 26 | 26 | 4.875 | % | |||||||||||||
Notes due May 1, 2030 ("2030 Senior Unsecured Notes") | 27 | 27 | 10.250 | % | |||||||||||||
| Total principal amount | 107 | 205 | |||||||||||||||
| Less: current portion | — | (98) | |||||||||||||||
Less: unamortized debt issuance costs | (1) | (1) | |||||||||||||||
| Total included in long-term debt, net | $ | 106 | $ | 106 | |||||||||||||
On October 1, 2025, the Company repaid $98 million of its 2025 Senior Unsecured Notes upon maturity using cash on hand.
Each of the 2025, 2027, 2028 and 2029 Senior Unsecured Notes were issued pursuant to an indenture entered into by and among the Company, each of the guarantors party thereto and U.S. Bank National Association, as trustee. The 2030 Senior Unsecured Notes were issued pursuant to an indenture entered into by and among the Company, each of the guarantors party
thereto and U.S. Bank Trust Company, National Association, as trustee. Interest on each of the Senior Unsecured Notes is payable semi-annually. The Senior Unsecured Notes mature as specified in the table above unless earlier repurchased or redeemed and are guaranteed by certain of the Company's subsidiaries. In March 2023, the Company designated ADESA and its subsidiaries as unrestricted subsidiaries under the indentures governing the Senior Unsecured Notes.
The Company may redeem some or all of each series of Senior Unsecured Notes at any time prior to certain specified redemption dates (the "Unsecured Early Redemption Dates") at the redemption prices and applicable make-whole premiums set forth in each respective indenture, plus any accrued and unpaid interest to the redemption date. Prior to the Unsecured Early Redemption Dates, the Company may also redeem up to 35% of the aggregate principal amount at a redemption price equal to 100% plus the respective interest rate specified in the table above, together with accrued and unpaid interest to, but not including, the date of redemption, with the net cash proceeds of certain equity offerings. With respect to the 2030 Senior Unsecured Notes, the Company may, at its option, redeem in the aggregate up to 10% of the original aggregate principal amount of the 2030 Senior Unsecured Notes during the period from, and including, May 1, 2025 to, but excluding May 1, 2027, at a redemption price equal to 105.125% of the 2030 Senior Unsecured Notes to be redeemed, plus accrued and unpaid interest thereon to the relevant redemption date. Finally, on or after the Unsecured Early Redemption Dates, the Company may redeem some or all of the Senior Unsecured Notes in whole or in part at redemption prices set forth in each respective indenture, plus accrued and unpaid interest up to but excluding the redemption date.
Real Estate Financing
The Company finances certain purchases and construction of its property and equipment through various sale and leaseback transactions. As of December 31, 2025, none of these transactions have qualified for sale accounting due to meeting the criteria for finance leases, or forms of continuing involvement, such as repurchase options or renewal periods that extend the lease for substantially all of the asset's remaining useful life, and are therefore accounted for as financing transactions. These arrangements require monthly payments and have initial terms of 20 to 25 years. Some of the agreements are subject to renewal options of up to 25 years and some are subject to base rent increases throughout the term. As of both December 31, 2025 and 2024, the outstanding liability associated with these sale and leaseback arrangements, net of unamortized debt issuance costs, was $482 million and was included in long-term debt in the accompanying consolidated balance sheets.
Financing of Beneficial Interests in Securitizations
As discussed in Note 8 — Securitizations and Variable Interest Entities, the Company has retained certain beneficial interests in securitizations pursuant to the Company’s obligations as a sponsor under the Risk Retention Rules. Beginning in June 2019, the Company entered into secured borrowing facilities through which it finances certain retained beneficial interests in securitizations whereby the Company sells such interests and agrees to repurchase them for their fair value at a stated time of repurchase.
As of December 31, 2025 and 2024, the Company had pledged $374 million and $354 million, respectively, of its beneficial interests in securitizations as collateral under the repurchase agreements with expected repurchases ranging from March 2026 to June 2033. The securitization trusts distribute payments related to the Company's pledged beneficial interests in securitizations directly to the lenders, which reduces the beneficial interests in securitizations and the related debt balance. Pledged collateral levels are monitored daily and are generally maintained at an agreed-upon percentage of the fair value of the amounts borrowed during the life of the transactions. In the event of a decline in the fair value of the pledged collateral, the repurchase price of the pledged collateral will be increased by the amount of the decline.
The outstanding balance of these facilities, net of unamortized debt issuance costs, was $371 million and $351 million, as of December 31, 2025 and 2024, respectively, of which $148 million and $136 million, respectively was included in current portion of long-term debt in the accompanying consolidated balance sheets.
Transportation Fleet Financing
On October 20, 2025, the Company entered into a loan and security agreement (the "Loan Agreement") with Citizens Bank, N.A. ("Citizens Bank"), which provides for up to $250 million in aggregate principal amount of loans to finance certain equipment for its transportation fleet. All loans extended under the Loan Agreement are secured by a first priority lien on the transportation fleet and will mature within to seven years depending on the attributes of the financed equipment. At maturity, a final payment of unamortized principal will be due to Citizens Bank. These outstanding loans will bear interest at a rate based on the applicable SOFR swap rate, with tenors ranging from two and a half to four years, plus an applicable margin
ranging from 2.80% to 2.95% depending on the maturity of the loan. The Company has the option to prepay the outstanding balances of the loans prior to the Maturity Date.
As of December 31, 2025, the outstanding liability under the Loan Agreement, net of unamortized debt issuance costs, was $23 million, of which $4 million was included in current portion of long-term debt in the accompanying consolidated balance sheets.
Principal Maturities
The following table summarizes the aggregate principal maturities due in each period for Senior Secured Notes, Senior Unsecured Notes, real estate financing, financing of beneficial interests in securitizations, and transportation fleet financing as of December 31, 2025. Maturities related to financing of beneficial interests in securitizations are estimated based on expected timing of payments from the securitization trusts to the lender.
As of December 31, 2025 | |||||
| (in millions) | |||||
| 2026 | $ | 153 | |||
| 2027 | 133 | ||||
| 2028 | 92 | ||||
| 2029 | 73 | ||||
| 2030 | 1,708 | ||||
| Thereafter | 2,759 | ||||
| Total | $ | 4,918 | |||
As of December 31, 2025, the Company was in compliance with all debt covenants.
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.