Apollo Global Management Inc. tossed a lifeline to Carvana Co. by offering to buy roughly half of a struggling junk-bond sale that will help the used-car retailer fund an acquisition and make new investments.
The firm submitted a $1.6 billion order anchoring Carvana’s offering of eight-year bonds at a yield of 10.25 percent, according to people with knowledge of the matter who asked not to be identified because they’re not authorized to speak publicly.
Carvana raised $3.275 billion through the sale, which priced Wednesday afternoon at par to yield 10.25 percent and will finance its acquisition of Adesa Inc.'s U.S. car-auction business and improvements across 56 of its sites. The deal was revamped after Carvana’s bankers at JPMorgan Chase & Co. struggled to find enough buyers for the original structure, which included a $2.275 billion junk bond and $1 billion of preferred equity.
Representatives for Apollo, Carvana and JPMorgan declined to comment.
The Wall Street Journal first reported about Apollo’s offer earlier Wednesday.