The luxury carmaker announced it had raised £121mln (US$150mln) via a bond sale with the debt carrying an eye-watering 12% interest rate.
There’s the option to draw down another £123mln (US$100mln) with the coupon on the additional funds rising as high as 15%.
The inflated cost of borrowing reflects the fact the market thinks Aston Martin is seen as a risky investment as it has misfired financially and racked up £1.1bn of debts.
According to Philippe Houchois, equity analyst at US investment bank Jefferies, the cash injection will support the development of new special edition cars as well as providing a “buffer” for the DBX SUV.
The highly-anticipated new model, with a starting tag price of £150,000, will be unveiled in December, with deliveries set for the second quarter of 2020.
“The DBX is critical to the viability of the business and I think that the cost of which Aston is raising debt confirms that basically DBX will make or break the success of the company,” Houchois said.
The past year hasn’t been rosy for James Bond’s favourite carmaker, which navigated Brexit uncertainties while its IPO dreams drove down the wrong path.
The shares were initially priced at 1,900p but lost momentum after a series of profit warnings. On Wednesday the shares were changing hands for 536.40p, down 6.68%.
“Investors feel the need to get their hands on the money relatively quickly,” said Russ Mould, Investment Director at AJ Bell.
“At the moment [the company] is struggling to prove to people that it can put itself on a sustainable path to meeting its long-term cash profit-earning target.”
The company said it expects full-year results in line with analyst consensus, with car sales between 6,300 and 6,500, capital expenditure of up to £350mln and net financing expense of around £70mln.