From Puck, October 14:
Our current economic era does not want for tales of creditor-on-creditor violence, but few examples can match what has been going on at Aston Martin, the U.K. automaker and James Bond’s whip of choice. Alas, while Aston Martin makes beautiful and very expensive cars, it doesn’t make much money. In the first half of 2026, Aston Martin generated revenue of around $830 million—and an adjusted EBIT loss of around $140 million. The company also has more than $2 billion of debt—including a new $750 million senior secured loan provided by HPS, the private credit arm of BlackRock. Aston Martin has a hefty debt-to-EBITDA ratio of nearly 9x, per the company’s half-year earnings call.
Needless to say, that’s not a great debt ratio for a company making very little, if any, money. As a result, a huge, transatlantic fight has broken out between the old creditors, including a different arm of BlackRock, and the new creditors. The battle has been led by HPS, which has successfully “primed” the old creditors by taking the available security—comprising plants, cars, and Aston Martin’s I.P. and brand (probably the most valuable asset the company still has)—and placing themselves atop the capital structure. Authentic Brands Group, the collector of tired assets such as Brooks Brothers, is also part of the new financing, with its contribution secured by some of the Aston Martin I.P.
In short, the old bondholders have taken it on the chin. Prior to the HPS money coming in, the existing bonds were trading in the mid 80 cents on the dollar. After having the company’s collateral swiped by HPS and Authentic, the old bonds traded down to around 55 cents on the dollar, yielding something like 35 percent. They are rated CCC, deep in junk-bond territory. Naturally, the old creditors are threatening legal action.
Indeed, there are already blue-chip bankers and lawyers swarming all over this thing. The carmaker was advised on the HPS deal by Latham & Watkins, as well as Simpson Thacher and David Nemecek, the dean of the creditor-on-creditor violence bar, who had been at Kirkland & Ellis before conflicts led him to jump ship to Simpson for a lot of money. Lazard and Moelis & Co. are advising Aston Martin, too.
Meanwhile, the furious creditors are being represented by Akin Gump and Quinn Emanuel, with Jefferies as their financial advisor. Pallas Partners, the law firm, is also representing at least two of the peeved creditors—Arini Credit Master Fund Limited and Tresidor Europe Credit Limited—in a recently filed application in the Southern District of New York seeking discovery from HPS, Authentic Brands, Lazard, and Moelis regarding the new financing.
The court has yet to rule on the petition, and the old creditors have yet to file a lawsuit against the company, which would have to be administered in U.K. courts. The purpose of the potential litigation appears to be to get a judge to overturn the HPS transaction. It’s certainly worth a shot, though success seems unlikely due to the loose covenants contained in the old bond indentures, which allow for this kind of financial engineering. In other words, it’s pretty much their own damn fault that HPS and the company were able to pull off the collateral swipe.
Drive to Survive
Aston Martin, which has been in business for 113 years, has already gone through seven bankruptcies. These days, the company—which trades on the London Stock Exchange—is controlled by Canadian billionaire Lawrence Stroll, who has a one-third ownership stake.Other owners include the Saudi sovereign wealth fund; Li Shufu, chairman of the Chinese automaker Geely; and Mercedes-Benz. Back in January 2020, Stroll bought around 17 percent of the company at a steep discount to its initial public price, and became the company’s executive chairman three months later. Almost seven years on, the company’s market capitalization is a mere $500 million or so—tiny by industry standards. The stock is down 41 percent so far this year, and more than 90 percent from its October 2018 I.P.O. price.
Stroll also owns—albeit separately—the Aston Martin Formula One team, where he’s installed his son, Lance, as a driver. The team has not been particularly successful over the years (thanks in part to Lance), but is nonetheless quite valuable. In 2025, Aston Martin, the car company, sold its stake in Aston Martin, the racing team, for around $150 million at around a $3.2 billion valuation—which means, alas, the F1 assets are of no use to the aggrieved Aston Martin bondholders.
Another interesting wrinkle: HPS, which BlackRock acquired in 2025 for $12 billion in stock, is also a lender to (and a minority owner of) Aston Martin’s F1 team. The company refinanced debt related to the F1 team’s technology campus, and bought a 25 percent stake in the franchise in September 2024, along with Accel, the Silicon Valley venture capital firm. Both HPS and BlackRock are also investors in the privately held Authentic Brands, which is part of the controversial new financing.
It’s pretty rare, I have to say, to see one arm of a big-time creditor prime another arm of the same creditor. But I guess they figured that if someone was going to prime BlackRock, it might as well be an arm of BlackRock. What’s more, I’m told, BlackRock is part of the group of original creditors fighting to undo the HPS deal. You can’t make this stuff up. That’s where we are these days in the crazy world of liability management exercises, or L.M.E.s.
Anyway, Stroll has probably lost more than 75 percent of what he originally invested in the company, though it’s hard to know for sure. Of course, those losses have been covered, and then some, by the F1 team, which Stroll and his partners bought out of administration for around $115 million in August 2018, when it was known as Force India. It has since increased in value by some 30 times.
In February, alongside its fifth new profit warning since September 2024, Aston Martin announced that it had sold the permanent use of the F1 naming rights to Stroll’s F1 team, which already had the naming rights until 2055, for roughly $68 million. Then, in April, Stroll’s Yew Tree investment consortium made a $68 million loan to Aston Martin, of which about $27 million was drawn by the company. A portion of the HPS financing was used to repay and retire the Yew Tree loan. The HPS money was also used to pay down an existing bank revolver, totaling around $200 million, and, according to company management, “significantly” increased the automaker’s “liquidity” to around $450 million—giving it more runway to absorb operating losses.
But it’s how the company obtained the HPS financing, and what it gave up to get it, that really has the O.G. Aston Martin bondholders peeved. I’m told the existing bondholders were prepared to provide Aston Martin with new financing, but their offer was essentially ignored in favor of the HPS deal, which the Financial Times described as a “surprise.”
The company has also been extremely secretive about what assets HPS has taken as collateral for its new loans. In the July 22 press release about the deal, Aston Martin allowed only, in masterfully vague terms, that the HPS financing is “secured against certain of the Group’s assets situated in a newly incorporated subsidiary, together with certain other assets of the Group.” Another press release, put out two days later in response to lingering bondholder questions, did not do much to clarify things.
On July 29, several Wall Street research analysts tried to get the company to divulge details of the new financing during its first-half earnings call. In response to a question from Henning Cosman, at Barclays, Aston Martin C.F.O. Doug Lafferty said, “It’s an important deal for the company. I would just add that all the information about the deal has been set out in our announcements that we made last week, so there’s not really much more to add today.”....
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