Boeing receives orders nearly eight times equating its whopping $10 billion bond offering

Moody’s Ratings downgraded Boeing company’s credit rating to a rung above junk.

By Sneha Sengupta On Apr 29, 2024

According to the media reports, post disclosing a quarterly loss and $3.9 billion in cash burn, Boeing Co. got over $77 billion in orders for its maiden bond offering.

A person with knowledge of the situation who is not authorized to speak publicly claims that the corporation is financing $10 billion with maturities ranging from three to 40 years. According to the individual, the 40-year part will return 2.25 percentage points more than Treasuries, following prior discussions for roughly 2.65 percentage points.

The deal’s positive reaction among investors “may say more about strong demand for new issuance than the prospects for Boeing credit,” according to Brandywine Global Investment Management portfolio manager Bill Zox.

The company’s outlook is likewise poor according to Moody’s, and Boeing is currently rated one step above high yield by all three analysts.

During a conference call last week, Brian West, the chief financial officer of Boeing, stated that the business still has access to $10 billion and that he plans to maintain the investment-grade rating.

According to the source, the bond deal is being managed by Citigroup Inc., Bank of America Corp., JPMorgan Chase & Co., and Wells Fargo & Co. Wells Fargo, BofA, and Citi declined to comment.

As per Bloomberg Intelligence analyst Matthew Geudtner’s note on Monday, April 4, Boeing has the means to maintain its investment-grade status, and the downgrades from the rating agencies give the company at least a year to demonstrate progress toward normalizing operations and approaching the FAA production limit.

Boeing Company