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Bond Market News
Boeing To Plead Guilty Regarding Plane Crashes; Bonds Trade Stable
July 9, 2024
Boeing has agreed to plead guilty to criminal fraud conspiracy charges relating to two fatal crashes of its 737 Max in 2018 and 2019. It faces a criminal fine of as much as $487.2mn (maximum as per law). Boeing has already paid a prior fine and if the judge allows crediting it alongside the overall fine, the new penalty would stand at $243.6mn. Besides this, Bloomberg notes that Boeing will spend at least $455mn to boost its compliance and safety programs over the next three years. It is to be noted that US government contracts represented 37% of Boeing’s 2023 revenue, including foreign military sales. As per Bloomberg, the latest update has the potential to complicate Boeing’s interaction with the government.
However, Boeing’s shares and bonds traded broadly stable. Its 6.528% 2034s were trading at 103.8, yielding 6%.
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