Carvana Revamps $3.3 Billion Junk Bond in Effort to Lure Buyers

Used-car retailer Carvana Co. is restructuring a multibillion-dollar junk-bond offering as it struggles to attract investors despite double-digit yields.

The company dropped a $1 billion preferred-equity chunk and increased the debt portion by the same amount to a total of $3.275 billion, according to a person with knowledge of the matter. It also added a bankruptcy make-whole provision, a type of safeguard that pays creditors a fee should the company refinance while in chapter 11.

The move is already fueling angst among the firm’s existing creditors, with Carvana’s 5.625% notes due 2025 among the worst performers on the secondary market ...