(Reuters) -Used-car retailer Carvana said on Wednesday it has signed an agreement to reduce its total debt outstanding by over $1.2 billion, sending its shares up 31% in premarket trading.

The agreement signed with a group of noteholders will eliminate more than 83% of its unsecured notes maturing in 2025 and 2027 and lower required cash interest expense by over $430 million per year for the next two years.

(Reporting by Nathan Gomes in Bengaluru; Editing by Shweta Agarwal)