- 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.
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.Â
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.
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.
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