Ferrari has just raised $713 million USD through a bond issue to boost immediate liquidity. Unlike many automakers Ferrari has not yet felt the full impact of the coronavirus pandemic. During the first quarter of 2020 deliveries rose by 4.9 percent. However net revenues declined by 0.8 percent due to lower sponsorship income from its Formula 1 division and lower engine sales to Maserati.
Overall earnings were down by 5.2 percent to $240 million USD and cash flow more than halved to $80 million USD. Ferrari expects second-quarter sales to fall as the coronavirus pandemic has forced some customers to cancel orders. A rebound in the second half of its financial year is expected, however, Ferrari has all but abandoned forecasting future results.
The bond issue will boost Ferrari’s net liquidity by $2.20 billion USD. The terms of the unsecured bond carry a 1.5 percent annual interest rate. There are many different types of bonds, in this case, an unsecured bond is a type of loan, and is only secured by the bond issuer’s good credit standing.