Aston Martin Returns To Debt Market As DB11 Drives Turnaround

Mar 31 2017 | 5:21pm ET

James Bond’s preferred carmaker is close to returning to the public debt markets for the first time in five years.

Anchored on a turnaround plan that predicts positive free cash flow by next year and a competitive offering yield, Aston Martin was set to successfully price on Friday at least £530 million in a mix of high-yield and senior secured notes, according to a Reuters article, with $400 million coming in at around 6.50% in annual yield and £230 million at around 5.75%. 

The five-year, B3/B- rated debt will refinance two higher-coupon tranches set to mature next year, and is being coordinated by JP Morgan, Deutsche Bank and Goldman Sachs.

With nearly two thirds of 2017 production for its latest car, the DB11, already sold out, Aston Martin is guiding for annual EBITDA this year of £160 - £165 million this year, compared to just £61 million in 2015, the article said. The company’s turnaround began in 2012, amid weak results and downgrades from both S&P and Moody’s, when Italian private equity company InvestIndustrial acquired 37.7% and provided investment capital for what became the DB11. 

With the turnaround in place and the company booking a 48% rise in fourth-quarter sales, Aston Martin has plans for one or two new models every year for the next seven years, including an SUV and an electric version of its $200,000 Rapide coupe. 

Also lending some heft to the turnaround: Additional backers of the company include Daimler, which owns 4.92% of the firm via non-voting shares acquired when it agreed to provide electrical systems for Aston Martin vehicles. 

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