Fitch downgrades Aston Martin to ’CCC+’ amid cash flow concerns
Investing.com -- Fitch Ratings has downgraded Aston Martin Lagonda Global Holdings PLC’s Long-Term Issuer Default Rating to ’CCC+’ from ’B-’ due to deteriorating liquidity and weaker-than-expected financial performance.
The rating agency also lowered Aston Martin Capital Holdings Limited’s senior secured rating to ’B-’ from ’B’, while maintaining its Recovery Rating at ’RR3’.
The downgrade reflects significantly negative free cash flow (FCF) in the first nine months of 2025, with Fitch now forecasting a 2025 FCF shortfall of approximately £400 million. The agency expects FCF to remain negative until 2028, despite planned reductions in capital expenditure and operating expenses.
Aston Martin’s liquidity declined to about £248 million at the end of September 2025, down from £514 million at the end of 2024, following negative FCF generation of £415 million. This occurred despite a £53 million capital increase and £106 million in proceeds from the sale of the company’s F1 team stake.
The luxury automaker faces challenging market conditions across key regions. Sales in Asia-Pacific fell 17% year-over-year in the first nine months of 2025, with declines accelerating each quarter. In the United States, Aston Martin’s largest market in 2024, customer uncertainty has increased following tariff introductions, despite relative advantages from the US-UK trade deal.
Fitch forecasts operating margins to fall sharply in 2025, with a potential improvement in 2026 as the company benefits from an enriched product mix driven by the limited-edition Valhalla model and cost control measures. However, these forecasts remain well below previous expectations.
The Yew Tree Consortium, Aston Martin’s major shareholder, has demonstrated commitment to provide support, but this will be tested as Fitch expects significant cash funding needs in 2026-2027. Additional debt is considered a less viable option due to double-digit interest costs on outstanding notes.
Aston Martin is implementing cost-saving measures, planning to reduce adjusted selling, general and administrative expenses to £275 million and capital expenditure to £350 million in 2025, down from the £300 million and £400 million initially guided at the beginning of the year.
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