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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.

Mercedes F1 boss Toto Wolff takes a stake in Aston Martin

LONDON — Mercedes Formula One boss Toto Wolff has taken a stake in British sportscar maker Aston Martin, whose executive chairman Lawrence Stroll runs the Racing Point F1 team, according to company filings. A Mercedes F1 spokesman said Wolff's move was purely an investment on the Austrian's part and would be diluted by a rights issue on Monday from 4.77% to less than 1%. "Fully diluted following the pending rights issue, this investment will represent a 0.95% stake in the company," he added. "It is a financial investment and Toto's partnership and executive role with Mercedes are unaffected by the transaction." Swiss billionaire Ernesto Bertarelli has also bought a 3.38% stake which will be similarly diluted. Wolff previously had a 16% shareholding in former champions Williams but sold that after he joined the Mercedes team, where he serves as principal and owns 30%. Canadian billionaire Stroll, whose son Lance drives for Racing Point alongside Mexican Sergio Perez, is close to Wolff. The Silverstone-based team — to be renamed Aston Martin next year — use Mercedes engines and gearboxes. Mercedes-Benz's parent Daimler also has a small stake in Aston Martin. "It's clear that Aston are now Mercedes' B team," the Daily Mail quoted one Formula One insider as saying. Wolff's future at Mercedes has been the subject of some media speculation, with the 48-year-old linked variously to senior management roles with Liberty Media-owned Formula One and at Aston Martin. His Aston Martin shares were bought from Yew Tree Overseas Limited, a vehicle controlled by Stroll who acquired a roughly 25% percent holding in Aston Martin with a consortium of investors. Mercedes have won the past six Formula One drivers' and constructors' titles but have six times world champion Lewis Hamilton out of contract at the end of the 2020 season, which has yet to start due to the COVID-19 pandemic. Hamilton, who has also been linked to Ferrari, had told reporters before the global crisis changed the sporting and financial landscape that his decision would depend on Wolff's plans. The Briton is now expected to stay at Mercedes, with a radical overhaul of Formula One's sporting and technical regulations postponed to 2022. Related Video: Motorsports Aston Martin Mercedes-Benz

Aston Martin Rapide puts the future on display at CES

Aston Martin looks to be on the verge of a technological revolution. That includes a new platform, powertrain, design language... the works. And at CES, it's showing how its next generation of vehicles will incorporate new infotainment technologies, as well. Stemming from a partnership recently signed with Chinese company Letv (which we're not sure how to pronounce either), this Aston Martin Rapide S is decked out with bright tech. It has a 13.3-inch high-def touchscreen display in the center console, a 12.2-inch display in the instrument cluster, new speed-recognition technology, and remote services. All the features come from Letv's Internet of the Vehicle program. Few of these features are ground-breaking, but everything being relative, it's a big step for Aston Martin. After all, the British automaker makes almost all of its models based on a platform that dates back fifteen years, a V12 engine that's even older, and no transmission with more than a single clutch. But that's all about to change with a new generation on the horizon, and this demonstrator hints at just one way in which we'll soon see that transformation take shape. Related Video: LETV AND ASTON MARTIN REVEAL THE AUTOLINK RAPIDE S AT CES 6 January 2016, Las Vegas USA: Leading global technology company Letv and luxury sports car brand Aston Martin today revealed at the Consumer Electronics Show the first results of their collaboration – an Aston Martin Rapide S incorporating the latest Letv Internet of the Vehicle (IOV) system. Aston Martin and Letv signed a memorandum of understanding (MOU) on December 3rd 2015 to confirm research projects that include the development of connected electric vehicles through to manufacturing consultation on future electric vehicles. The ideation and engineering of the Aston Martin Rapide S project has been led by the Letv IOV team and has focused on a new concept for the centre console and instrument panel. The center console is now a 13.3 inch HD touch screen and the instrument panel is now a 12.2 inch screen incorporating electronic instrumentation and gauges. The original human-machine interaction (HMI) has also been updated by integrating Letvs latest speech recognition technology. Letv first showed its Autolink system in November 2015, the first time the technology company had released a product specifically developed for automotive applications.