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Do also wonder whom are the undisclosed investors
Could do with a Trump win..
Along with all the big airliners and cruiseliners also doing this...
They're position better prior to junk bonds because most were highly profitable.
Aston set out to raise this from a different stance point sadly already in the mire
Covid perhaps whilst adding to the anxt has also been its saviour because this kind of fund raising in reality has been made seem more normal.
No one.
Absolute no one here should risk in my mind a single penny that they can't right off.
This is a pure gamble by any stretch of the imagination and can't be based on fundamentals..
I'm in because I haven't stake my life savings and nor would until I can much lesser risk in the next 12 months .
I think we like seeing such a company turn around and again that's why I'm in
I really really like the Daimler connection and ultimately believe now aston will be Daimler Aston Martin at some point...
But I'll be the first to take my money n run if I see any negativity that turns this little bit of hope back to a definite short.
Newbies here ...Good luck..and to the rest of us that have been here battling against the tide even better luck.
Damn very negative indeed! Looks like the author has his own agenda and probably shorted Aston Martin. He's making some fair points, but to completely leave out the positive sides of this week news is just ridiculous.
The new bonds are rated triple-C by rating agency S&P, in the lowest reaches of the “junk” bond market, and its new funds will be used to repay the looming debt pile worth over £900m, as well as the £20m loan it took out through the UK government's coronavirus business support scheme.
“The triple-C rating properly reflects the risks,” said Luke Hickmore, investment director at Aberdeen Standard Investments. “There's hardly any room for a mis-step for this business.”
The double-digit coupon marks one of the highest yields on offer from a European company this year. The new bonds are secured against Aston's assets, including its production facilities in Warwickshire and its intellectual property.
The carmaker is paying an even higher 13.5 per cent interest on £259m of new debt that ranks behind these secured bonds. Aston has privately placed this debt with unnamed investors, which also received the added incentive of equity warrants that could hand them 5 per cent of the company.
Earlier this week, the Warwickshire-based manufacturer forged closer ties with German carmaker Daimler as it seeks to push into electric vehicles.
The deal allows Daimler to raise its stake in Aston Martin to 20 per cent by 2023 in exchange for permitting the luxury carmaker access to its hybrid and electric vehicle technology. The new bond’s prospectus disclosed that Aston might have to make cash payments to the German group if its share price fell below a certain level and warned that this “could have a material adverse effect on our business”.
While the new fundraising will leave the company with more than £500m of cash on its balance sheet, several investors said they were unconvinced that the end of the luxury carmaker’s troubles is in sight.
“Its debt burden has just grown and grown and earnings have never come with it,” said one bond fund manager, who added that pinning hopes on “the new sugar daddy” — Daimler — was naive.
The pandemic has added to Aston Martin's existing woes. The company made £259m total losses in the nine months to September 2020, compared to an £111m loss in the same period last year.
As of October 22, 85 per cent of Aston Martin's car dealers globally had fully reopened, according to the prospectus. The carmaker aims to sell 10,000 vehicles a year by 2025, up from fewer than 6,000 sold last year, with hopes pinned on the success of its first sports utility model, the DBX.
Mr Hickmore questioned whether the sales targets were realistic: “How are they going to get dealerships open and people enthused about owning a DBX right in the middle of the worst economic environment we've seen?
Not sure my above link works so this what the FT says.
Financial Times
Aston Martin LagondaAston Martin forced to pay 10.5% yield on $1bn bond dealInvestors extract high price from UK luxury sportscar group that was already struggling before pandemic
Aston Martin Lagondas: the company has a debt pile of more than £900m © REUTERS
October 30, 2020 6:04 pm by Nikou Asgari and Robert Smith in London
British carmaker Aston Martin was forced to pay double-digit interest rates to borrow more than $1bn on Friday, as bond investors demanded high compensation to lend to the cash-burning business.
The luxury carmaker will pay 10.5 per cent in annual interest on $1.1bn of new bonds as part of a wider refinancing package that included a £125m equity raise. This was higher than the roughly 9 per cent interest rate touted to investors earlier in the week.
The fundraising aims to revive Aston Martin's fortunes and bolster its balance sheet in the face of a pandemic that has damped consumer demand for cars. The manufacturer was struggling to keep up with competitors even before the shock from coronavirus, driving a 90 per cent plunge in Aston’s share price since its calamitous stock market listing two years ago.
Ffs it sounds so negative the way they say it!
https://www.google.com/url?sa=t&source=web&rct=j&url=https://amp.ft.com/content/a0864c3c-6c20-4415-b95d-9eb729f128fa&ved=2ahUKEwjwuYiG2t3sAhWKTBUIHdcVCT4QiJQBMAB6BAgBEAc&usg=AOvVaw2bRLS8jV225N0aXR1iuYv5&cf=1
Well my amateur opinion is 61p by end of next week. However this is a crazy stock small enough for the market makers to take your stop losses / position. so buy and hold on tight my friend.
So what's people's view on next few weeks so rise or not?