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Bond, junk bond? Aston Martin financial ratings go south as it awaits DBX

Ratings agencies Standard & Poor's and Moody's have taken a dim view of Aston Martin Lagonda. S&P cut its credit rating on the storied carmaker deeper into junk territory this week, and Moody's revised its credit outlook to "negative" after the company raised $150 million in debt from a bond issue at 12% interest, with the option to raise another $100 million at 15%. The Standard & Poor's rating was trimmed by one notch to 'CCC+', which reflects substantial risks and takes it close to default territory after a faster-than-expected cash burn this year. The outlook is negative.  The negative outlook reflects ongoing pressure on profits, a high cash burn, and very high leverage in the face of heightened risks linked to a potential no-deal Brexit and new tariffs on car imports threatened by the United States. The potential salvation for the company is its new DBX luxury SUV, the success of which is critical to its ambitious growth strategy and ongoing creditworthiness, S&P said. But Moody's noted that it's burning cash at a high rate as it nears the launch of the DBX. The British carmaker, known as James Bond's favorite marque, has been hit by falling demand in Europe, the Middle East and Africa. It slumped to a first-half loss in July. Chief Executive Andy Palmer said concerns around Brexit and U.S.-China trade relations were skewing the outlook to the downside, so it was prudent to address investor concerns about its balance sheet. "Taking this debt on — short-term debt — is we think the correct tool to completely remove that thesis that we don't have sufficient liquidity," he told Reuters. "In every substantial and material way, this ensures that we can get through to DBX in spite of what all of those global uncertainties might throw at us." The main tranche comprises notes with an interest rate of 12% due in 2022, while the additional notes could be issued under the same terms if permitted, or could be issued as unsecured notes with an interest rate of 15%, Aston Martin said. Shares of stock in the company, which have had a precipitous fall since they listed in London in October 2018 at 19 pounds, were trading down 5% at 545 pence in early deals. Broker AJ Bell said Aston Martin was known for its high end prices and that situation now also applied to its debt. "These rates are very high and are a major red flag that investors consider the car company to be a high risk entity," it said.

Aston Martin Valkyrie set to make 1,000 horsepower, rev to 11,100 rpm

Aston Martin is working with Cosworth to develop the Valkyrie engine, an engine (we now know) unlike that found in any other production car. Today it has shared some of the specifics. The naturally aspirated 6.5-liter V12 will make 1,000 horsepower and rev up to 11,100 rpm. We did the math, that's 153.8 horsepower per liter in a non-boosted car. Cue the jaws dropping to the floor. The first thought here goes to what this thing will sound like. Aston has us covered there with a video it tweeted out this morning, which you can play below. Developed in conjunction with longtime technical partner @Cosworth, the new V12 had to satisfy a simple, yet extraordinary brief; to create the ultimate expression of the internal combustion engine. #AstonMartinValkyrie #ASTONMARTIN #Cosworth pic.twitter.com/BQXUVD355f — Aston Martin (@astonmartin) December 12, 2018 We got a sneak preview awhile back of the sound, and this just confirms how awesome it's going to be. The noises bring us back to a time when F1 engines actually sounded good. Peak power is made at an astounding 10,500 rpm, so you'll want to rev it all the way up to the top before shifting. Torque is predictably much lower — it makes 546 pound-feet at 7,000 rpm, when most engines are either done or running out of steam. Numbers for the Valkyrie's hybrid system are still unavailable, so we'll have to wait to find out the combined output. The large V12 weighs 454 pounds, and Aston says it's a fully stressed element of the chassis — removing the engine would literally split the car in two. Titanium connecting rods, F1-spec pistons and a billet-machined crankshaft that takes six months to produce are but a few highlights of the Cosworth engine. Aston Martin says the crankshaft is 50 percent lighter than the One-77's V12 rotating assembly. Thankfully, we've been provided with a gallery of engine photos to drool over. Making such a ridiculous and powerful engine emissions-compliant enough for a road car is something every car enthusiast can appreciate. Naturally aspirated V12s are arguably one of the most satisfying engine configurations to have been put forth on this earth. One that revs to 11,100 rpm sounds like it could crack anybody's list of greatest road car engines ever. Aston Martin sounds hyped about it, and we don't blame them. This car, and this engine, are going to be monsters. View 16 Photos Related video:

Prince Charles visits Aston Martin with his Aston, helps build a DBX, draws tabloid ire

A very British thing happened this week: Prince Charles visited Aston Martin's new factory in St. Athen, driving there in his own Aston Martin. He took his DB6 that over a decade ago was converted to run on waste wine (yes, really) and was used in William and Kate's wedding. His visit included touring the new factory that will build the 2020 Aston Martin DBX, as well as talking with Aston's apprentices. A plaque was placed to commemorate the visit. Aston also let him put the finishing touch on a DBX, placing the front badge. The bad news is, no one will be able to say their DBX was partly made by royalty, as the car Prince Charles finished was a pre-production model. The good news is that customer DBXs will have their badges applied professionally, and while Prince Charles' badge placement skills may be fine, we trust the pros to ensure secure and aligned fitment. Maybe we shouldn't pile on, after all, Prince Charles attracted the ire of a British publication called Express. The tabloid secured footage of Charles pulling up to the factory in the DB6, and proceeded to deride a lack of turn signal and clipping the center line while making the turn. Of course if you watch the video yourself, you'll see that, yes, he did fail to signal, but otherwise his turn seemed entirely boring and inoffensive. We at Autoblog see vastly worse driving on a daily basis, so we think the tabloids ought to cut Charles a break on that turn.