Bloomberg Anywhere Remote Login Bloomberg Terminal Request a Demo


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Moody’s Cuts Formula One as $1 Billion Bond Sale Boosts Leverage

Oct. 19 (Bloomberg) -- Moody’s Investors Service cut the ratings on Formula One’s debt a single step after the auto-racing series started raising $1 billion of private high-yield bonds to pay its owners a dividend.

The ratings firm reduced the London-based company’s loans to B1 from Ba3 and assigned a B2 corporate family rating to its parent Delta Debtco Ltd., citing the “materially increased leverage” after the debt placement and a “more aggressive financial strategy” after a share sale in May was abandoned, according to a report.

Formula One’s lenders agreed to a two-year loan extension and the $1 billion dividend earlier this month, raising the amount it will distribute to shareholders this year to $2.2 billion, according to Moody’s. Moody’s estimates the company’s debt to be more than six times its earnings before interest, tax, depreciation and amortization, and for leverage to increase further next year.

“Following the company’s aggressive distribution steps in 2012, the ratings are initially weakly positioned at the B2 level,” analysts led by Olivier Beroud wrote in the report. If Formula One’s leverage were to climb to more than seven times Ebitda or it generates negative free cash flow, the rating would come under negative pressure, Moody’s said.

Formula One’s owners include CVC Capital Partners, Oslo-based Norges Bank, U.S. mutual fund Waddell & Reed Financial Inc., BlackRock Inc. and Chief Executive Officer Bernie Ecclestone.

To contact the reporter on this story: Stephen Morris in London at

To contact the editor responsible for this story: Faris Khan at

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.