Aston Martin Bondholders Seek Court Order Over £450M Brand Rights Loan

A pair of US investment firms has petitioned a New York court to force the release of documents concerning the £450 million loan that transferred a majority of Aston Martin’s brand rights to a third party.

Arini Capital Management and Tresidor Investment Management are seeking materials from the lending group and its advisors. The two bondholders are also readying a distinct legal action in the UK capital.

Why the Bondholders Are Seeking the Documents

In July, Aston Martin took out a £450 million ($606 million) loan from a syndicate headed by HPS Investment Partners, a major player in private credit. A division of Authentic Brands Group, the company that owns the Reebok licensing rights, participated in the lending.

An additional £100 million comes with a stipulation: Authentic Brands is required to acquire a 50.1% interest in the entity that controls Aston Martin’s brand rights outside the automotive sector. The price for that holding has not been disclosed.

The brand rights encompass licensing, merchandise, and lifestyle goods. They generate revenue even as the carmaking operations incur losses. The bondholders contend that the transaction placed those assets out of their reach.

The court filing names HPS, which is owned by BlackRock, as well as the UK subsidiary of Authentic Brands and the advisory firms Moelis and Lazard. Aston Martin itself declined to provide most of the information the creditors sought.

A Money-Losing Carmaker With a Valuable Name

The bondholders have outlined two legal avenues. The first is based on New York law that governs the bonds. The second cites Section 423 of the UK Insolvency Act, which allows courts to reverse transactions conducted below market value.

They seek either a reversal of the transfer or financial compensation. As yet, no claim has been submitted in London.

On Tuesday, Aston Martin shares ended trading at 33.20 pence, a drop of over 99% from their 2018 initial listing. The company will also lose its spot in the FTSE 250 index during the September rebalancing.

Other consumer names have faced comparable declines, and Nike’s recent 12-year low illustrates how a well-known brand can cease to prop up a stock price.

Increasing global bond yields have made it more difficult for weaker borrowers to refinance. Without a valuation, neither party can establish the value of the brand stake.