Luxury carmaker Aston Martin has finalized a £550 million debt financing deal with HPS Investment Partners, a BlackRock-owned private credit firm. This financing package consists of a £450 million Senior Secured Term Loan and an additional £100 million Delayed Draw Term Loan, with a maturity in July 2031 and an interest rate of approximately 10% (6.75% over SONIA). The proceeds from the £450 million term loan were used to repay Aston Martin's existing £170 million revolving credit facility and £20 million drawn from the Yew Tree Consortium facility, with the remainder allocated for general corporate purposes and transaction costs.
The deal has faced significant opposition from some existing creditors, including Arini Capital Management and Tresidor Investment Management, who are part of an ad hoc group holding about 67% of Aston Martin's outstanding senior secured notes. These creditors argue that the new financing structure violates key terms of the company's current borrowing agreements and places certain assets beyond their reach. They had reportedly offered an alternative funding solution and warned Aston Martin against proceeding with the HPS deal.
Despite the controversy, Aston Martin's Chief Financial Officer, Doug Lafferty, stated that the new financing significantly enhances the company's liquidity, bringing its pro forma liquidity to approximately £340 million as of June 30, 2026, up from £230 million at the end of March. The company asserts that this improved financial position provides greater resilience and flexibility to execute its product plans and continue its focus on year-on-year improved financial performance, margin expansion, and cash flow generation. The financing is secured against assets held in a newly incorporated subsidiary, as well as other company assets.
This refinancing effort comes after Aston Martin has issued three profit warnings over the past year and continues to deal with significant debt, exceeding £1.5 billion. The company anticipates an adjusted annual loss before tax and interest to be slightly below analysts' expectations of £184 million. The successful closure of this £550 million package, along with an additional £100 million in permitted debt incurrence capacity junior to the new financing, is crucial for the company's ongoing operations and future product development plans.
