Aston Martin - comment - 26Q3

Aston Martin’s Q3 results are unlikely to change the trajectory of bond prices. Adjusted EBITDA of £70m beat our £61m forecast, but the operational improvement does little to alter the credit story. The Company continues to burn cash, and the recent refinancing has bought time rather than solved the funding problem. While £322m of liquidity provides runway to execute the product rollout, we continue to see a further £150–200m funding requirement before Aston Martin becomes self-sustaining. Our base case still sees free cash flow remaining negative after interest and capex ahead of the 2029 maturities.

For bondholders, the critical issue is how this funding gap will be addressed. The NewCo financing has demonstrated that Aston Martin can raise additional debt outside the existing bondholder group, weakening creditor protections and creating a clear risk of further structural subordination. Stronger margins, Valhalla deliveries and lower capex should improve cash generation, but we do not expect these benefits to eliminate the need for further capital. We remain cautious on the bonds. The funding gap remains unresolved, and any further capital raise risks subordinating existing bondholders.