Formula 1 has received an amendment to its term loan and credit facility to help the sport weather its current crisis until the end of 2021.
The prospect of a massive drop in revenue due to the COVID-19 pandemic compelled F1 commercial rights holder Liberty Media to shore up F1's finances back in April, with the holding company reattributing $1.5 billion in net asset value to The Formula One Group.
To offer the latter more financial breathing space as the pandemic crisis unfolds, Liberty Media has secured an amendment to the covenant governing F1's $2,9 billion term loan and its yet undrawn $500 million revolving credit facility.
The amendment provides that, subject to compliance by Formula 1 with certain additional conditions, the net leverage financial covenant shall not apply until 1 January 2022.
A leverage ratio is any one of several financial measurements that assesses the ability of a company to meet its financial obligations.
In short, as it faces a severe revenue downturn, F1 has been temporarily granted less stringent financial requirements to help it remain in compliance of its covenant.
"Formula 1 remains the pinnacle of motorsport as it celebrates its 70th anniversary," said Chase Carey, Chairman and CEO of Formula 1.
"This new flexibility in our debt covenants, along with a strong balance sheet and ample liquidity, will enable us to weather this difficult time and we are excited to start the season in Austria on 3-5 July.
"We return to the track with added purpose and determination with our new #WeRaceAsOne initiative."