26th Sep 2019 14:58
(Alliance News) - Moody's Investors Service lowered the outlook for Aston Martin Lagonda Global Holdings PLC on Thursday, reflecting increased debt from a recent note issue.
On Wednesday, the luxury car maker, a favourite of James Bond, issued USD150.0 million of notes at a rate of 12%.
This prompted S&P Global Ratings, also on Thursday, to downgrade Aston Martin's issuer credit and issue ratings, giving a negative outlook. Debt leverage is now above what was expected, S&P said, due to the note issue.
Moody's has assigned a B3 rating to the USD150 million notes, and the company's overall rating has been lowered to negative from stable.
Tobias Wagner, a senior analyst at Moody's, said: "The negative outlook reflects the increased debt from the notes issuance, which will result in continued very high leverage for at least the next 24 months and delay deleveraging further.
"The continued high cash outflows for at least 2019 and 2020 also weigh on rating and outlook, but the new notes should provide the liquidity needed to see the company through the critical upcoming SUV DBX launch unless the company's cash flow weakens from Moody's current expectations."
A successful launch of the DBX range, as well as better profit and cash flow, could lead to an upgrade for Aston Martin's ratings, but Moody's said this is unlikely in the near-term.
Downward pressure comes from a lack of volume or profit improvements, which could be prompted by weaker-than-expected sales of the DBX range.
Aston Martin shares were 6.1% higher on Thursday at 584.20 pence each, less than a third of the 1,700p initial public offering price a year ago.
By George Collard; [email protected]
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