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Boeing’s Bonds Trade Weaker as Talks Break Down with Union
October 10, 2024
Boeing’s bonds traded weaker across the curve, as talks broke down with its union and workers. Boeing said that the union made “non-negotiable demands” and the union said that Boeing was “hell-bent on standing on the non-negotiated offer”. S&P said that an estimated $10bn cash burn this year by Boeing would likely imply the need for additional funding to cover day-to-day cash needs and debt maturities. It is reported that the one-month tiff has costed Boeing about $1bn. Following this, sources have noted that Boeing is considering options including selling common stock, mandatory convertible bonds and preference shares. Sources also added that banks have apparently been building shadow books, to gauge interest from investors for such securities in the event that Boeing decides to pursue those options. Analysts noted that Boeing needs $10-$15bn to maintain its investment grade credit ratings.
Boeing’s 3.3% 2035s were down 1.1 points to trade at 78.8, yielding 6.1%.
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