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Bond Market News
Boeing Raises $21bn in Capital
October 30, 2024
Boeing raised $21.1bn through an expanded share sale to strengthen its balance sheet and avoid a potential junk credit rating downgrade. The company sold 112.5mn common shares at $143 each, a 7.7% discount from the previous closing price of $155, and $5bn in depositary shares tied to convertible preferred stock. This $16.1bn common share sale is the largest for an already-listed company since the 2012 AIG sale. The convertible stock offers a 6% dividend and will convert to equity by 2027. The underwriters have the option to sell an additional 16.9mn common shares and $750mn in depositary shares. Separately, Boeing also has a new credit agreement in place for $10bn giving it additional short-term access to liquidity. The funds are critical for maintaining Boeing’s investment-grade rating and supporting jet production amidst ongoing challenges, including a labor strike and past issues with the 737 Max. Boeing’s shares rose 1.5% following the announcement.
Its bonds traded stable with its 3.5% 2045s at 66.7, yielding 6.47%.
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