Boeing taps debt market to raise $10 billion
Boeing (BA.N) on Monday tapped debt markets to raise $10 billion, after the US planemaker burned $3.93 billion in free cash during the first quarter following slowing production of its best-selling jet, sources familiar with the matter said.
Boeing’s credit rating hovered above “junk” status last week from rating agencies as the planemaker tries to recover from a crisis that began in January after a midair blowout of a cabin panel door plug on a nearly 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 coming due in 2025 and 2026.
Credit rating agencies on Monday both assigned ratings nearing junk to Boeing’s new senior unsecured notes, with S&P assigning a BBB- rating and Moody’s assigning a Baa3 rating.
Moody’s said the rating reflects Boeing’s still-strong business profile, which continues to mitigate ongoing weak performance in commercial aircraft, although headwinds surrounding the division could persist through 2026.
Boeing will use the bond proceeds to increase its liquidity ahead of maturities on its existing debt load, including $4.3 billion in 2025, S&P wrote on Monday.
“It looks like it will go well,” said one of the sources, who was looking at buying the bonds, adding that he was told it was eight times oversubscribed.
The deal’s bookrunners leading the bond sale include Bank of America, Citi, JPMorgan and Wells Fargo, according to the deal’s term sheet.
Boeing declined to comment, but pointed to remarks from Chief Financial Officer Brian West during the company’s earnings last week in which he said Boeing was committed to managing its balance sheet in a prudent manner, with the goal of prioritizing its investment-grade rating and helping the factory and supply chain to stabilize.