LONDON -- Aston Martin said it had raised $150 million from a bond issue, with the option to raise another $100 million if order targets are met, to bolster its cash in an uncertain trading environment.
CEO Andy Palmer said the financing would address concerns in the market about the company's balance sheet.
"Taking this debt on -- short-term debt -- is the correct tool to completely remove that thesis that we don't have sufficient liquidity," Palmer said on Wednesday.
"In every substantial and material way, this ensures that we can get through to DBX in spite of what all of those global uncertainties might throw at us," he said.
The DBX, Aston Martin's first SUV, will be unveiled in December. Deliveries will start at the end of the second quarter of next year, Palmer said.
Chief Financial Officer Mark Wilson said the automaker expected economic headwinds and uncertainty to continue. "What we have announced today is a cost and time-effective structure that immediately strengthens our liquidity in the short term and the option to draw further funding as we successfully execute the plan," he said.
The main tranche comprises 12 percent notes due in 2022, while the additional notes could be issued under the same terms if permitted or could be issued as unsecured notes with an interest rate of 15 percent.
Aston Martin slumped to a first-half loss in July, as sales fell short of its original expectations. Shares in the company, which listed in London in autumn 2018 at a price of 19 pounds ($24), closed at 5.75 pounds on Tuesday.
Broker AJ Bell said Aston Martin was known for its high end prices and that situation now also applied to its debt. "These rates are very high and are a major red flag that investors consider the car company to be a high risk entity," it said.
Analysts at Jefferies, who said they had expected the company to raise 200 million pounds at a rate of 10 percent, said it was an "expensive short-term de-risking."
Aston Martin's debt raise feels like "kicking the can down the road but should de-stress liquidity," they said. "It also provides needed breathing room to execute the DBX launch, although a high order rate should reduce the need to raise more debt."