Some of Carvana Co.'s largest creditors including Apollo Global Management Inc. and Pacific Investment Management Co. have signed a pact binding them to act together in negotiations with the struggling used-vehicle retailer, a move meant to prevent the kind of nasty creditor fights that have complicated other debt restructurings in recent years.
A group of funds holding around $4 billion of Carvana's unsecured debt, or around 70 percent of the total outstanding, have signed the cooperation agreement, which will last a minimum of three months, according to people with knowledge of the matter who asked not to be named because they were not authorized to speak publicly.
The agreement aims to prevent the kind of splintering among lenders that troubled companies such as Envision Healthcare Corp. have used in recent years to secure more favorable terms in complex debt deals. Such infighting is partly an outcome of an era of easy money that's weakened lender protections and left creditors with few options but to turn against each other for a better spot in the repayment line.
