+

Cookies on the Business Insider India website

Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.

Close
HomeQuizzoneWhatsappShare Flash Reads
 

Investors are clamoring for new Boeing debt after the company's $641 million first-quarter loss, report says

May 1, 2020, 00:15 IST
Business Insider
The new Boeing 787-10 Dreamliner sits on the tarmac before a delivery ceremony to Singapore Airlines at the Boeing South Carolina Plant in North CharlestonReuters
  • Demand for new Boeing bonds is strong after the company's first-quarter report revealed a dire loss, CNBC reported Thursday.
  • Investor interest in fresh debt issuance could total $75 billion, sources told CNBC, more than triple what Boeing was looking to raise as the coronavirus pandemic and 787 Max controversy tanks performance.
  • Boeing announced Wednesday it lost $641 million in the first quarter, its second profit shortfall in five years.
  • Watch Boeing trade live here.
Advertisement

Interest in new Boeing debt is skyrocketing in the wake of the plane manufacturer's dismal first quarter, CNBC reported Thursday.

Demand for new debt issuance across a range of maturities could reach $75 billion, sources told CNBC, more than triple the $20 billion Boeing intends to raise as it rides out an economic downturn and continued struggle to resume 787 Max deliveries. The manufacturer may raise more than necessary should investor interest hold strong.

The debt would be priced at 500 basis points above the US Treasury yield of the same maturity, CNBC reported. Maturities in demand include 5-, 7-, 10-, 20-, 30-, and 40-year bonds.

Read more: An investment chief who oversees $29 billion explains why he's bullish on a niche industry that's 'like the red blood cell of tech' — and shares 2 stocks he's buying

Boeing shares more than halved through 2020 as the coronavirus pandemic halted plane sales and curbed its production pipeline. The company announced Wednesday it burned through $4.3 billion in cash through the first quarter and posted a $641 million loss, its second profit shortfall in five years. Boeing also issued production cuts for its commercial plane segment and said it planned to cut 10% of its workforce.

Advertisement

Despite the quarterly loss, investors pushed shares up as much as 12% on Wednesday.

A bond sale isn't the only option Boeing has explored to shore up cash. The plane manufacturer sought $60 billion in US government loans in mid-March and drew down on a $14 billion loan.

Boeing traded at $141.45 as of 1:55 p.m. ET Thursday, down roughly 57% year-to-date.

Now read more markets coverage from Markets Insider and Business Insider:

The Fed expands its $600 billion lending program for struggling businesses but leaves start date unannounced

Advertisement

'E-commerce on fire': Here's what 4 analysts expect from Amazon's first-quarter results

An investing strategy called 'crisis alpha' designed to thrive during meltdowns just whiffed on the fastest bear market in history. Here's how that's upended a $318 billion industry — and what it means for the future.

Markets Insider

Read the original article on Business Insider
You are subscribed to notifications!
Looks like you've blocked notifications!
Next Article