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Bond Market News
Boeing Launches Stock Offering to Raise Up to $22bn
October 29, 2024
Boeing has launched a stock offering that could raise up to $22bn as it aims to strengthen its finances impacted by a month-long strike involving 33,000 workers. The plane-maker offered 90mn shares of common stock and $5bn in mandatory convertible securities. This move is critical for maintaining its investment-grade credit rating. S&P added that the offering is certainly favorable for Boeing’s credit quality and that it will factor in their assessment of the rating in the context of continued negative free cashflow. If the offering is oversubscribed, Boeing could issue an additional 13.5mn shares and increase the convertible offering by $750mn. The mandatory convertible securities will offer dividends between 6.0% and 6.5%, with a conversion premium of 17.5% to 22.5%. The offerings were heavily oversubscribed and may price close to the last closing share price of $155, according to sources. Recently, its factory workers rejected a contract offer with a 35% wage increase over four years.
Boeing’s bonds were up by 0.5-1 points with its 3.5% 2045s up at 66.4, yielding 6.5%.
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