Carvana Co. (NYSE: CVNA), the leading e-commerce platform for buying and selling used cars, today announced its intention to offer, subject to market and other conditions, $1 billion of a new series of perpetual preferred stock, liquidation preference $1,000 per share (the “Series A Preferred Stock”) in a private offering only to (i) qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”) and (ii) non-U.S. persons outside the United States in offshore transactions in reliance on Regulation S under the Securities Act.

J.P. Morgan Securities LLC and Citigroup will act as book-running managers for the proposed Series A Preferred Stock private offering.

Holders of Series A Preferred Stock will be entitled to receive dividend payments only when, as and if declared by Carvana’s board of directors. Dividends will either be (a) payable in cash, if and to the extent declared by Carvana’s board of directors, or (b) added to the liquidation preference if not so declared. Dividends, if declared and paid in cash, will be payable on March 31, June 30, September 30 and December 31 (each, a “Quarter Date”) of each year beginning on June 30, 2022. Dividends, if not declared and paid in cash, will compound quarterly on each Quarter Date and be added to the liquidation preference. No dividend may be declared unless paid immediately in cash (it being understood that no dividends may be declared and paid in securities or otherwise “in kind”).

The dividend rate, redemption and other terms of the Series A Preferred Stock will be determined at the time of pricing of the offering.

The net proceeds of the Series A Preferred Stock private offering will, together with a proposed offering of a new series of unsecured senior notes due 2030 (the “New Notes”), be used to finance Carvana’s announced acquisition of the U.S. based physical auction business of ADESA, Inc., and they will also be used for working capital, capital expenditures and other general corporate purposes. The consummation of the private offering of the Series A Preferred Stock is not contingent upon the closing of the New Notes offering, and the New Notes offering is not contingent upon the closing of the private offering of the Series A Preferred Stock.

Carvana has also announced a public offering of $1 billion of Class A common stock pursuant to an effective registration statement and a preliminary prospectus supplement. Ernest Garcia, II, along with Ernie Garcia, III, Carvana’s Chief Executive Officer, and entities controlled by one or both of them, have indicated an interest in purchasing up to an aggregate of $432 million of the Company’s Class A common stock in the offering, based on their pro rata ownership. Carvana intends to use the net proceeds from the offering of Class A common stock for general corporate purposes.