Case Summaries · Stressed credits

Aston Martin: the £550m HPS dropdown that took the brand IP out of the 2029 bondholders’ reach

Aston Martin raised £550m of new secured debt led by HPS in July. The 2029 bondholders say the deal released their charge over the brand IP and moved it into new Cayman subsidiaries that do not guarantee their notes. They have sent a s.423 letter before claim in London and asked a New York court for documents.

By EURx · 7 October 2026

A storied brand, no stranger to rescues

Founded in 1913, Aston Martin is probably best known as the carmaker behind the DB5, James Bond's car since Goldfinger. It is also known for going bust: by the time it went public in October 2018 it had gone bankrupt seven times.¹ Its largest shareholder today is Canadian billionaire Lawrence Stroll, who made his fortune in fashion and then moved into F1, buying the predecessor to Aston Martin's team in 2018.² In early 2020, as losses at Aston mounted, he formed a consortium called Yew Tree, made up of former business partners and other UHNW individuals, and agreed to rescue the carmaker via a £182m investment as part of a £500m recapitalisation.³⁴

Unfortunately, as in prior instances, this injection did not manage to fix the business, so the company continued to rely on shareholders and asset sales to bridge its cash flow gaps. Saudi Arabia's PIF arrived as a new anchor shareholder through a £654m raise in 2022.⁵⁶ In 2025, the company sold its F1 team stake for about £106m, and Yew Tree invested another £52.5m.⁷⁸ In April 2026, Yew Tree added a further £50m (and subsequently became the largest shareholder at about 31%).⁹

How the wheels fell off

Aston Martin has sold ~6,000 cars a year on average since 2018, yet must fund the engineering, model refreshes and emissions work of a full-line luxury carmaker. At those volumes, even a small sales decline hits profits hard. To make the numbers work, Aston has long relied on sales of high-margin “Specials” (limited-run models such as the Valkyrie, Valour and Valhalla, built in small numbers and priced far above the core range), but recurring production delays over the years have irked customers and impacted profits.

The repeated shareholder cash injections helped buy time, but the business remained structurally challenged. Pressure again mounted in 2025, when wholesale volumes dropped 10% and revenue fell 21% to £1,258m. The company blamed US tariffs, weaker demand in North America / Asia, fewer Specials (ahead of the Valhalla launch), and a decision to hold production back to match demand. Gross margin dropped from 37% to 29% because of those issues plus £65m of extra warranty, dealer support and quality costs. The company reported a free cash outflow of £410m and year-end net debt stood at £1,380m (adjusted net leverage of 12.8x). The company responded by drawing further on its RCF, cutting its five-year capex plan from £2bn to about £1.7bn (mainly by delaying its EV platform) and reducing its workforce by up to 20%.

By February 2026 the company had issued its fifth profit warning since September 2024. Liquidity was down to £250m after the £410m cash burn in 2025. Aston shored up liquidity further by selling the rights to use the brand name in F1 to Stroll's team for £50m, but the capital structure remained unsolved.

Stroll / Yew Tree now needed an external solution. The company confirmed in July that it was in discussions with potential financing providers. Key considerations:

• With an equity market cap (at the time) of ~£350m against £1.5bn of net debt, Yew Tree was out of the money, and the secured '29s were trading at distressed levels. In a restructuring plan or Chapter 11, the bondholders would expect most if not all of the company.
• Stroll was also on both sides of the F1 naming rights sale, in which his racing team paid Aston a one-off £50m for permanent use. Creditors in control would likely look closely at that and any other related-party deals.¹⁷²²

It seemed likely that the Yew Tree consortium would opt for a deal that ensured it retained control, avoided any related-party scrutiny and experienced no dilution (in the near term anyway).

A £550m liquidity deal that ran over bondholders

On 17 July, Bloomberg reported that Aston Martin was in talks with funds including HPS about new debt secured against assets moved out of existing creditors' reach. Simpson Thacher was advising the company. Aston Martin confirmed the same day that it was in discussions with potential financing providers (which presumably included bondholders).

It was subsequently reported that an ad hoc group of bondholders had written to the company multiple times in July offering new money and proposing wider talks on the capital structure, but that group said the company never engaged with them.²⁰¹⁹¹⁸

On 22 July, Aston Martin announced a £450m senior secured term loan and a £100m delayed draw term loan, both at SONIA+675 and due July 2031, with HPS leading. Proceeds repaid the RCF and the £20m drawn on a £50m facility from Yew Tree members. Liquidity was £145m at 30 June and about £340m pro forma for the deal.²²²⁴²⁵

Debt after the HPS deal, as of 22 July 2026. Source: Bloomberg, company releases.

The borrower and the IP sit outside the noteholders' collateral

The borrower is not named in the press release. According to the noteholders it is Silver HoldCo 2, one of five new Cayman subsidiaries set up for the deal. A sixth entity, SilverCo 2, was designated unrestricted under the 2029 indenture on or about 21 July.²⁰

On 22 July the noteholders' security agent released its fixed charge over the brand IP held by AMLL, which guarantees the notes. That covered 195 UK and 69 EU trademarks and 474 UK and 558 EU designs. The IP went to SilverCo, which does not guarantee the notes and gave no replacement security.²⁰

The £100m delayed draw depends on half the non-auto IP going to ABG

The lenders are HPS funds and ABG Europe, the UK arm of Authentic Brands. Per the filing, the £100m delayed draw only becomes available once 50.1% of the non-auto IP is transferred to ABG “in exchange for the DDTL”. The noteholders also point to licence-back termination rights on insolvency or a change of control, which they call a “poison pill”.²⁰

The ad hoc bondholder group includes Arini, Sculptor and Tresidor

The HPS deal was announced three days after Quinn Emanuel wrote to the company for the group on 19 July.²⁰ 9fin has reported that the group includes Arini, Sculptor and Tresidor.²⁶

How the dispute developed. Source: court filings, company releases.

The dispute is running in London and New York

Pallas (ad hoc group’s litigation counsel) sent a letter before claim on 2 August alleging a transaction defrauding creditors under s.423 of the Insolvency Act 1986. ABG was told the claim will ask the court to unwind the 50.1% transfer and return the IP.

Arini and Tresidor filed a section 1782 application in the Southern District of New York on 24 August, seeking documents and depositions from HPS, Authentic Brands, Moelis and Lazard for use in the English proceedings. Judge Cave ordered service by 15 September and made a preservation order. HPS, ABG, Moelis and Lazard were served on 2 September and filed oppositions on 21 September, including a declaration from Tom Smith KC, and asked for oral argument. Arini and Tresidor replied on 28 September with 45 further exhibits. As of 6 October the court had not ruled or set a hearing.²⁷²⁰

Most of the Q2 cash outflow was interest

H1 2026 revenue was £629m, up 38%, with a gross margin of 33.8% and adjusted EBIT of minus £109m. Free cash outflow in Q2 was £81m, and £73m of that was cash interest. HPS gets a monthly minimum liquidity test from August.²²

The 2029 notes trade in the 50s

Both the $ 10% 2029s and £ 10.375% 2029s are quoted in the mid-50s context as of 7 October, with very little trading given the current legal backdrop.²⁸ S&P also cut the existing secured notes to CCC after the deal.²³

The s.423 claim and the ABG transfer come next

We are watching whether the s.423 claim is issued in London, what the SDNY court does with the 1782 application, and whether the 50.1% IP transfer to ABG goes ahead. We will update as the docket moves.

Sources

This summary uses company releases, court filings, public pricing sources and press coverage. We have not used any non-public material.

1. The Guardian, 20 September 2018 link
2. MoneyWeek, Lawrence Stroll: the petrolhead who saved Aston Martin link
3. The Fashion Law, Aston Martin: Breaking Down a Post-IPO Odyssey link
4. Aston Martin rights issue announcement, 27 February 2020 link
5. Reuters, 5 September 2022 link
6. Insider Media, 30 September 2022 link
7. Reuters, 31 March 2025 link
8. Aston Martin RNS, Preliminary Results FY2025, 25 February 2026 link
9. Carscoops, 13 May 2026 link
10. Aston Martin 2020 Annual Report (2018 to 2020 wholesales) link
11. Aston Martin FY2022 results link
12. Aston Martin FY2024 results link
13. Hargreaves Lansdown, 25 February 2026 link
14. Automotive World, 29 July 2026 link
15. This is Money, 1 November 2023 link
16. AJ Bell / Alliance News, Aston Martin cuts outlook amid US tariff uncertainty, weakened demand link
17. The Guardian, 20 February 2026 link
18. Bloomberg, 17 July 2026 link
19. Just Auto via Yahoo Finance, 20 July 2026 link
20. In re Arini Credit Master Fund Ltd, 1:26-mc-00428 (S.D.N.Y.), Dkt 2 link
21. Google Finance, AML:LON, close 2 October 2026 link
22. Aston Martin Lagonda H1 2026 results link
23. Euronews, 29 September 2026 link
24. Aston Martin RNS, New £550 million debt financing, 22 July 2026 link
25. Carscoops, 23 July 2026 link
26. 9fin, Aston Martin bondholders co-op link
27. In re Arini Credit Master Fund Ltd, docket link
28. Bloomberg, pricing on the 2029 senior secured notes as of 7 October 2026