Fitch Ratings on Tuesday downgraded the senior secured debt rating for Aston Martin Capital Holdings Limited to CCC+ from B-, and lowered the company's Recovery Rating to RR4 from RR3. At the same time, Fitch affirmed the Long-Term Issuer Default Rating for Aston Martin Lagonda Global Holdings PLC at CCC+.
The ratings action reflects a new GBP50 million financing facility provided by members of the Yew Tree Consortium. Fitch said the facility sits higher in its recovery waterfall and is secured against a significant operating asset that had previously been unencumbered. That change in the security position reduces expected recoveries for holders of the existing senior secured notes.
Fitch noted the company reported liquidity of GBP178 million at the end of first-quarter 2026, down from GBP250 million at the end of 2025. The reduction followed negative free cash flow of GBP117 million in the quarter. Proceeds of GBP50 million from the sale of Aston Martin F1 naming rights partially offset the outflow. Including the new GBP50 million facility, pro forma liquidity is estimated to be around GBP230 million.
The ratings agency expects much of the negative free cash flow recorded in first-quarter 2026 to represent the majority of the full-year cash outflow. Fitch projects a significant improvement in free cash flow for 2026, forecasting negative free cash flow of roughly GBP180 million versus GBP422 million in 2025. Fitch attributes the improvement to approximately 500 Valhalla deliveries, a reduction in capital expenditures of about GBP300 million and the benefits of the company's ongoing transformation programme.
Operationally, Aston Martin reported a rise in gross margin to 34.7% in first-quarter 2026 from 27.9% in the year-ago quarter. The margin expansion was driven by 102 Valhalla deliveries during the quarter and a 17% increase in total average selling price. Management has maintained its 2026 guidance, targeting gross margins in the high-30s percentage range and expecting adjusted EBIT margin to improve materially toward break even.
Context and implications
- Fitch's downgrade reflects a change in the creditor priority and security profile created by the new facility from the Yew Tree Consortium.
- Reported liquidity deterioration and recent negative free cash flow are central to the agency's assessment, though pro forma liquidity improves when the new facility is included.
- Fitch expects operating and cash flow improvements in 2026 driven by deliveries, reduced capital spending and the transformation programme, but those expectations underlie the agency's forward-looking forecasts rather than the current rating.
Bottom line
Fitch's rating moves underline a reduced recovery outlook for senior secured creditors following the addition of the GBP50 million facility secured against a previously unencumbered asset. The firm also highlighted a path to material free cash flow improvement in 2026 based on delivery volumes, lower capex and ongoing operational changes, while noting recent liquidity and cash flow pressures.