The Boeing logo is displayed on a Boeing building on January 8, 2024 in El Segundo, California.
Mario Tama | Getty Images
Boeing tapped the debt markets on Monday to raise $10 billion, after the U.S. planemaker burned through $3.93 billion of available cash in the first quarter following a slowdown in production of its best-selling plane, sources close to the matter indicated.
Boeing’s credit rating hovered above “junk” status last week according to rating agencies, as the aircraft maker attempts to recover from a crisis that began in January after the explosion in theft of a cabin panel door cap on an almost new 737 MAX 9.
Investors and analysts have said Boeing could tap bond markets to get ahead of more than $12 billion in combined debt maturing in 2025 and 2026.
On Monday, the credit rating agencies both assigned near-risky ratings to Boeing’s new senior unsecured notes, with S&P assigning a BBB- rating and Moody’s a Baa3 rating.
Moody’s said the rating reflects Boeing’s continued strong business profile, which continues to mitigate the commercial aircraft sector’s current weak performance, although headwinds surrounding the division could persist through 2026.
Boeing will use the proceeds from the bond to increase its liquidity before its existing debt comes due, including $4.3 billion in 2025, S&P wrote Monday.
“It looks like everything will go well,” said one of the sources, who was considering buying the bonds, adding that he had been told they were eight times oversubscribed.
The deal’s bookrunners leading the bond sale include Bank of America, Citi, JPMorgan and Wells Fargo, according to the terms of the agreement.
Boeing declined to comment, but pointed to remarks by Chief Financial Officer Brian West during the company’s earnings release last week, in which he said Boeing was committed to managing its balance sheet prudently, in the aim to prioritize its investment grade rating and help the factory and supply chain stabilize.
