“As of 31 December 2019, Formula One had substantial liquidity headroom of around $900 million, comprising $400 million cash balance and $500 million undrawn committed revolving credit facility,” said the agency. It expected that to be sufficient “to absorb cash outflows from potential refunds of advance payments from promoters, sponsors and broadcasters, team payments, other overheads and interest costs in the event that the 2020 season is cancelled.” There remained however a degree of risk, rated as low, that liquidity would not be enough. Moody’s said Liberty Media had substantial available resources to support Formula One but saw “a relatively high probability” F1 will breach a leverage covenant whose terms could be amended or waived. “Moody’s considers that Formula One is relatively well placed to recover post coronavirus crisis, underpinned by its contracted revenue nature, strong franchise, large fan base and high cash conversion.” It said a downgrade of the rating could happen if further disruption to the race calendar caused concerns about liquidity or if a renewed Concorde Agreement was negotiated with materially adverse terms for the company.
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