14th Jan 2020 07:00
(Alliance News) - Moody's Investors Service on Monday downgraded luxury car maker Aston Martin Lagonda Global Holdings PLC amid weak profitability and low wholesale volumes in 2019 .
The ratings agency, which reiterated its negative outlook on Aston Martin, downgraded the company's corporate family rating to Caa1 from B3 and probability of default rating to Caa1-PD from B3-PD. Moody's also downgraded the instrument ratings of Aston Martin Capital Holdings Ltd's senior secured notes to Caa1 from B3.
"The downgrade reflects the weak profitability and low wholesale volumes in 2019 and particularly towards the end of the year," said Tobias Wagner, a senior analyst at Moody's.
"Cash flow for the second half of 2019 was also significantly below Moody's expectations resulting in a lower starting point for liquidity as the company prepares for the critical DBX production ramp up and another year of significant investment spending," Wagner added.
The negative outlook reflects the continued challenging overall market, uncertainty regarding the company's performance in 2020, negative free cash flow and potentially further funding needs, Moody's said.
A stabilization of the outlook would likely require a visibly improved liquidity and progress towards a more sustainable free cash flow profile, the ratings agency added.
By Tapan Panchal; [email protected]
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