I WONDERED ABOUT THAT

[Jon39]

We all know the feeling, well perhaps not, but that spoils the story.

A letter drops on the mat. You've got one year to pay up half a billion smackers, or else.
Income - not for a while. Piggy bank - not much in there. Oh dear.

Simple answer. Borrow more to repay the debt.

My specialist subject is not bonds, but might the proposed high proportion of borrowing in US Dollars, introduce an unnecessary financial risk? When there is substantial US Dollar income then that is fine, but otherwise unexpected foreign exchange movements, can sometimes disastrously magnify the debt owed (remember Freddie Laker).

http://www.nasdaq.com/article/aston-martin-hits-th...

https://www.bloomberg.com/news/articles/2014-05-05...

[RobDown]

They generate a significant block of earnings in dollars (US, China,HK, must of Middle East dollar pegged), so it's a good structural hedge for them

[james-witton]

Well as luck would have it I've just this morning received an email informing me of $120M waiting for me in a Nigerian bank account.
They can have some of mine.

[RobDown]

james-witton said:

Well as luck would have it I've just this morning received an email informing me of $120M waiting for me in a Nigerian bank account.
They can have some of mine.

Hey, me too! What are the chances of that!?

[avinalarf]

james-witton said:

Well as luck would have it I've just this morning received an email informing me of $120M waiting for me in a Nigerian bank account.
They can have some of mine.

James,a friendly piece of advice.
There is just the slightest of chances that the email may not be completely truthful.
So resist the urge to go out today and buy a new Aston until you make sure.
Please feel free to ask me for any other advice as I am a financial guru.

[Flugplatz]

Was it Solomon?

https://www.youtube.com/watch?v=_QdPW8JrYzQ

[JohnG1]

Jon39 said:

We all know the feeling, well perhaps not, but that spoils the story.

A letter drops on the mat. You've got one year to pay up half a billion smackers, or else.
Income - not for a while. Piggy bank - not much in there. Oh dear.

Simple answer. Borrow more to repay the debt.

My specialist subject is not bonds, but might the proposed high proportion of borrowing in US Dollars, introduce an unnecessary financial risk? When there is substantial US Dollar income then that is fine, but otherwise unexpected foreign exchange movements, can sometimes disastrously magnify the debt owed (remember Freddie Laker).

http://www.nasdaq.com/article/aston-martin-hits-th...

https://www.bloomberg.com/news/articles/2014-05-05...

Not just income in USD, think of outgoings. If AML is buying parts and paying in USD then there's a hedge there too.

Remember, if you have decent cash flow, you don't need to repay the principal, just pay the interest and roll the debt. Replacing payment-in-kind notes when rates are lower is a sensible move.

A £530m issuance, with $400m is around £320m in USD and £210m in GBP.

Repaying £304m of GBP debt and $165m of USD debt - £132m

So ratio of GBP:USD will change from 2:1 to 2:3

Bear in mind that the USA is not the only currency using the dollar, either explicitly or through a peg (HKD:USD is pegged, others too).

In other words, chaps with spreadsheets have done some thinking on this...

[james-witton]

Flugplatz said:

Was it Solomon?

https://www.youtube.com/watch?v=_QdPW8JrYzQ

Woo! Hang on chaps. I'm starting to get the feeling that you think I'm being scammed here. Is this not true?
Have I not got the millions?
Sh@t

Ps. Sorry OP I know this is a serious issue you have raised.