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Post by PG on Jan 13, 2020 18:05:01 GMT
Aston are clearly in need of finance and are having discussions with several people to try and secure some. But they must be in pretty desperate shape, as according to the business press today - "In September Aston raised $150m (£121m) with a bond issue but paid a heavy price for the new money, having to offer 12pc interest. As part of the same arrangement, the company also agreed a deal where if it secured 1,400 advance orders for the DBX it could draw a further $100m, on which it would pay 15pc interest. Issuing a profit warning last week, Aston said after winning 1,800 DBX orders it expects to draw down on the extra $100m within weeks. "
12% and 15% interest!! Sheesh. That's basically licenced robbery. But they were probably bought by people who actually want the company to go broke so that the bond holders take control of the company, as usually happens in these situations.
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Post by Martin on Jan 13, 2020 18:12:32 GMT
It makes a change for a manufacturer to be given a crazy interest rate than trying to get its customers to take one.
Seriously...doesn't sound good at all and they've got everything riding on the success of one product.
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Post by ChrisM on Jan 13, 2020 20:14:50 GMT
Was the codename for the bond issue "James" ??
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Post by Deleted on Jan 13, 2020 22:19:05 GMT
More like 'Trouble oh seven'.
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Post by Deleted on Jan 14, 2020 9:33:24 GMT
Skyfall would work.
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Post by PetrolEd on Jan 14, 2020 10:28:56 GMT
DBX looks a winner to me so maybe it is well worth betting the house on its success.
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Post by Deleted on Jan 14, 2020 10:43:33 GMT
I doubt that you believe that in a literal sense!
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Post by franki68 on Jan 14, 2020 14:58:11 GMT
No wonder they were doing some fantastic deals before xmas. The vantage deal was fantastic.
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Post by Big Blue on Jan 31, 2020 13:36:57 GMT
Catch up on here as well as in the motorsport section:
Lawrence Stroll purchased 16.8% of the company and in the same release they announced a rights issue of £4/share. In October 2019 they were floated at £19. The Chair that oversaw the deal is standing down but the CEO remains.
In other unrelated news, Norton motorcycles went bust due to being a pile of shite proposition (friends of mine visited the manufacturing hub and said it was not really geared up to take on building more than a bike a week).
It seems that cars lose money whether you own one or invest in them.....
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Post by PG on Jan 31, 2020 14:41:43 GMT
I'd like to think that the Stroll deal is good for Aston but I doubt it. From the Autocar article as to future strategy -
Lawrence Stroll leads investment consortium, becomes Aston Martin chairman CEO Andy Palmer stays on Job and cost cutbacks to follow Aston business plan revised Valkyrie will be launched this year Mid-engined Valhalla will follow Mid-engined strategy to continue, launching 2022 Lagonda launched delayed until at least 2025 Electric RapidE project suspende Stroll's Racing Point F1 team to be rebranded Aston Martin from 2021
So we're to expect more uber-expensive mid-engined stuff; getting into F1 - which is a great way to spend money!; cutbacks elsewhere; delays to any no electrification projects; no mention of getting a designer in who can actually design a beautiful car; no mention of how improve and sell more of the current range; no mention of what this means to the Merc tie-up for parts, engines, technology etc.
I can't help thinking that in a couple of years - if even that long - Aston will be back out with the begging bowl.
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Post by ChrisM on Jan 31, 2020 17:23:38 GMT
Is the DBX to be pronounced "Dee Bee Ex" or "Dee Bee Cross" ?? Will AM be re-branded as Aston-Stroll?
Don't AM sponsor Red Bull, so will that disappear ?
Worrying times for the brand, I'd have thought
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Post by johnc on Jan 31, 2020 17:36:36 GMT
And the DBX needs to be much closer to £100K to get any kind of traction in volume
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Post by Big Blue on May 26, 2020 9:09:06 GMT
Ah - the COO has legged it. Shares down 94% on the IPO. Niche car company with a history of selling a few hundred models a year struggles to maintain larger sales on the back of an historical brand name.
Who'd have thought, eh?
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Post by PetrolEd on May 26, 2020 10:15:04 GMT
Don't know. Strolls no fool and seems to have a real talent for extracting money from other peoples pockets. Bloke at AMG coming over to run the business which will mean far more Merc money. Hasn't Wolff put a load of cash in as well?
I'm very tempted to put £500 in to Aston Shares. My history of share dealing is more Nick Leason then Warren Buffett so please tell me if I'm an idiot for even the thought.
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Post by johnc on May 26, 2020 10:26:51 GMT
Don't know. Strolls no fool and seems to have a real talent for extracting money from other peoples pockets. Bloke at AMG coming over to run the business which will mean far more Merc money. Hasn't Wolff put a load of cash in as well? I'm very tempted to put £500 in to Aston Shares. My history of share dealing is more Nick Leason then Warren Buffett so please tell me if I'm an idiot for even the thought. I have seen a few articles which suggest that Stroll's money with Merc backing could make AM a snip at its current price. However in the current economic crisis who knows what will be selling in a year's time or whether the export markets where AM could really expand, will have an appetite for cars with price tags north of £140K
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Post by racingteatray on May 26, 2020 10:44:41 GMT
Aston are clearly in need of finance and are having discussions with several people to try and secure some. But they must be in pretty desperate shape, as according to the business press today - "In September Aston raised $150m (£121m) with a bond issue but paid a heavy price for the new money, having to offer 12pc interest. As part of the same arrangement, the company also agreed a deal where if it secured 1,400 advance orders for the DBX it could draw a further $100m, on which it would pay 15pc interest. Issuing a profit warning last week, Aston said after winning 1,800 DBX orders it expects to draw down on the extra $100m within weeks. "12% and 15% interest!! Sheesh. That's basically licenced robbery. But they were probably bought by people who actually want the company to go broke so that the bond holders take control of the company, as usually happens in these situations. They are what are termed politely "high yield bonds" (HYBs). Also known as "sub-investment grade bonds" or less politely "junk bonds". In the bond markets, which is my area of operations, the pricing of bonds (otherwise known as the interest rate) is almost entirely driven by corporate ratings issued by the likes of Moodys, Fitch and S&P. These are set by reference to the adjudged financial strength of the rated companies. When you invest in bonds, you do so in the expectation that, upon maturity of the bond, you will get back the principal amount (ie the face value of the bond) in full, and along the way you'll receive regular payments of interest. The interest rate (or coupon) directly reflects how confident investors feel that they will get back their principal in full at maturity. If you rated above BBB-, you are "investment grade" and can get away with very low interest rates, not offering security for your bonds and offering investors very little by way of covenant protections (covenants being contractual promises to do, or not do, certain things, or to maintain certain leverage ratios etc). Once your rating sinks below BBB-, you are sub-investment grade and the interest rates available to you start to rise, bondholders start to require security in order to lend to you, and you have to start agreeing to an increasingly lengthy shopping list of covenants. Aston are CCC+ with outlook negative, which is deep junk. Hence the eye-popping coupon - as I say, it directly reflects investor's confidence that they will actually get their original investment back, and a CCC+/negative rating is anything but a ringing endorsement of Aston's core financial health. Also of interest to anyone thinking of investing in Aston shares should be the fact that HYBs of this sort are always secured and typically investors require that security to extend to at least 80% of the company's assets with guarantees from subsidiaries of the company representing at least 80% of the group by value.
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Post by franki68 on May 26, 2020 11:47:55 GMT
Don't know. Strolls no fool and seems to have a real talent for extracting money from other peoples pockets. Bloke at AMG coming over to run the business which will mean far more Merc money. Hasn't Wolff put a load of cash in as well? I'm very tempted to put £500 in to Aston Shares. My history of share dealing is more Nick Leason then Warren Buffett so please tell me if I'm an idiot for even the thought. I am tempted as well,but the best advice I can give anyone on shares is do the opposite of me.
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Post by michael on May 26, 2020 14:47:41 GMT
Aston are clearly in need of finance and are having discussions with several people to try and secure some. But they must be in pretty desperate shape, as according to the business press today - "In September Aston raised $150m (£121m) with a bond issue but paid a heavy price for the new money, having to offer 12pc interest. As part of the same arrangement, the company also agreed a deal where if it secured 1,400 advance orders for the DBX it could draw a further $100m, on which it would pay 15pc interest. Issuing a profit warning last week, Aston said after winning 1,800 DBX orders it expects to draw down on the extra $100m within weeks. "12% and 15% interest!! Sheesh. That's basically licenced robbery. But they were probably bought by people who actually want the company to go broke so that the bond holders take control of the company, as usually happens in these situations. They are what are termed politely "high yield bonds" (HYBs). Also known as "sub-investment grade bonds" or less politely "junk bonds". In the bond markets, which is my area of operations, the pricing of bonds (otherwise known as the interest rate) is almost entirely driven by corporate ratings issued by the likes of Moodys, Fitch and S&P. These are set by reference to the adjudged financial strength of the rated companies. When you invest in bonds, you do so in the expectation that, upon maturity of the bond, you will get back the principal amount (ie the face value of the bond) in full, and along the way you'll receive regular payments of interest. The interest rate (or coupon) directly reflects how confident investors feel that they will get back their principal in full at maturity. If you rated above BBB-, you are "investment grade" and can get away with very low interest rates, not offering security for your bonds and offering investors very little by way of covenant protections (covenants being contractual promises to do, or not do, certain things, or to maintain certain leverage ratios etc). Once your rating sinks below BBB-, you are sub-investment grade and the interest rates available to you start to rise, bondholders start to require security in order to lend to you, and you have to start agreeing to an increasingly lengthy shopping list of covenants. Aston are CCC+ with outlook negative, which is deep junk. Hence the eye-popping coupon - as I say, it directly reflects investor's confidence that they will actually get their original investment back, and a CCC+/negative rating is anything but a ringing endorsement of Aston's core financial health. Also of interest to anyone thinking of investing in Aston shares should be the fact that HYBs of this sort are always secured and typically investors require that security to extend to at least 80% of the company's assets with guarantees from subsidiaries of the company representing at least 80% of the group by value. I am appalling with finance to the point I avoid it at all costs but from my understanding of what you've put in relation to Aston Martin, if I put in £500 then I might get back £400 really quickly but be down £100 forever?
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Post by racingteatray on May 26, 2020 20:47:55 GMT
I am appalling with finance to the point I avoid it at all costs but from my understanding of what you've put in relation to Aston Martin, if I put in £500 then I might get back £400 really quickly but be down £100 forever? Something like that. Put £500 in at 15% interest and you'll earn £75/year. But the bond is probably very short term - say 3yrs, which means it is due in 2022. So really you've made a punt on £500, based on a hope that you'll get back approximately £725 3 years later provided Aston is still able and willing to pay you back in 2022. Also Bonds don't necessarily trade at their face value. That's why you hear talk of bond "yields". When companies get into difficulties, the price at which you can sell and buy them usually collapses as fast as the share price. So you might be able to buy a bond that nominally entitles you to £500 in 2022 and will pay you 15% per annum on its face value of £500 for, say, just £100. If the company struggles on for 15 months and doesn't default on its bonds, you've got your money back and your yield on your investment has been considerably more than the 10% headline rate. Anything more is the upside. This is another reason why distressed debt investing is a thing. But these sorts of risky bonds cannot be sold to "retail investors" (ie Joe Public) without breaching securities laws here, in the EU, in the US and frankly in most places.
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Post by racingteatray on May 26, 2020 20:53:55 GMT
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