Moody's lowers McLaren view to negative

Moody's Investors Service said it changed the outlook to negative from stable on McLaren Holdings Ltd. and McLaren Finance plc.

Moody's also said it affirmed the B2 corporate family rating and B2-PD probability of default rating of the company, along with the B2 instrument ratings at McLaren Finance.

The outlook change reflects the delay in achieving financial metrics that are in line with the B2 rating, including an adjusted debt-to-EBITDA ratio of 6x and positive free cash flow after investments and interest, the agency said.

Moody's said it recognizes the successful ramp-up of production volumes in the automotive division and associated strong EBITDA growth.

But significant ongoing research and development investments and significant losses in the racing division will reduce the pace of the company's adjusted EBITDA improvements, at least until 2020, the agency said.

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