Moody's ups McLaren, rates notes Caa1

Moody's Investors Service said it upgraded McLaren Holdings Ltd.'s corporate family rating to Caa1 from Caa2, and its probability of default rating to Caa1-PD from Caa2-PD. Concurrently, Moody's assigned a Caa1 instrument rating to the new $620 million of guaranteed senior secured notes due 2026, issued by McLaren Finance plc. The outlook has been changed to stable from negative.

“The upgrade reflects McLaren Holdings Ltd.'s progress in addressing its liquidity and capital structure over recent months, including the expected notes issuance. More specifically, various transactions including the sale of a minority stake in McLaren Racing, the sale and leaseback of key fixed assets, the additional investment from new and existing shareholders and expected notes issuance improve McLaren's liquidity profile, reduce its gross debt burden, extend the maturity profile and reduce investment needs,” Moody’s said in a press release.

The proceeds are mainly being used to refinance debt, including the 2022 notes, and improve the liquidity profile. Upon repayment, Moody's said it expects to withdraw the ratings on the 2022 notes.

The outlook reflects the improved liquidity and maturity profile of the company as well as the expectation of some improvement in performance in 2021, the agency said.

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