LONDON (Reuters) - Ratings agency Standard & Poor’s has cut its credit rating on storied carmaker Aston Martin Lagonda Holdings (AML.L) deeper into junk territory on Wednesday amid concerns over the UK’s exit from the European Union and threat of U.S. tariffs.
The ratings agency trimmed its rating 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 move comes as the luxury carmaker raised $150 million from a bond issue, with the option to raise another $100 million if order targets are met, to bolster its cash in a uncertain trading environment.
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.
In addition, the company is about to launch its new DBX luxury SUV, the success of which is critical to its ambitious growth strategy and ongoing creditworthiness, it said.
Reporting by Josephine Mason, editing by Karin Strohecker