British Supercar makers, McLaren Finance aims to raise $620 million through a bond issue, extending its funding spree as it strives to recover losses caused by the coronavirus outbreak.
Last day, the supercar maker held investor presentations for the new financing, aimed at refinancing current bonds and bolstering its balance sheet with extra debt.
The pandemic hit the company badly, delaying the Formula 1 racing series, hence forced the company to sell and lease back its headquarters for $235 million. According to a McLaren official, the money will help the company “substantially deleverage the business.” The bond issue follows a $760 million investment from Saudi Arabia’s sovereign wealth fund.
According to sources, the funding also marks a turning point in the company’s financial flexibility and refocuses attention on its production capabilities.
The new bond is expected to be rated Caa1/CCC+/B (Bond credit rating), which is among the lowest-rated debt, and will add to the recent rush of distressed issuers raising capital amid growing investor demand for higher yields.
McLaren expects all future cars to be hybrids by 2026. Its racing division will compete as the tenth team in the five-race Extreme E series. McLaren Racing acquired a $261 million strategic investment in Q1 2021, enabling it to fully fund its teams through 2023. It made $260 million in revenue in the same quarter.
Jaguar Land Rover, a British luxury automaker, had also resorted to the markets and sold a $592 million bond.