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Aston Martin issues bond

The luxury car manufacturer will gain a bit of headroom with its latest placing, but the coupon rate looks high compared with one of its biggest rivals
April 2, 2019

Aston Martin Lagonda (AML) will hope that fears over its ability to underpin its ambitious growth plans will be assuaged after it placed $190m (£145m) in notes due 2022, at a fairly heady coupon of 6.5 per cent.

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The luxury car manufacturer will use the funds for general operational purposes, with particular focus on investment through the third phase of its ‘Second Century Plan’, which targets annual sales of 14,000 and seven core models in 2022. The placing follows a $400m issue conducted in April 2017, also due in 2022, at the same coupon rate.

Aston Martin expects full-year interest costs to rise to around £63m from its previous guidance of circa £55m. Numis analysts say that there will be a circa £9.5m interest charge to the profit-and-loss statement, “potentially with some offset by reduction in the revolving credit facility (RCF) requirements”. Its net debt position should not be affected.

Numis predicts full-year 2019 pre-tax profits and earnings per share of £102.8m and 32.5p, respectively, rising to £176.8m and 57.6p in 2020.