Boeing Co. launched a nearly $19 billion share sale meant to address the troubled planemaker’s liquidity needs and stave off a potential credit rating downgrade to junk.
Peter McNally, global head of analysts at Third Bridge, joins us to give his thoughts on the company shares being under pressure.
The common-share portion alone would total just under $14 billion, based on Friday’s closing price of $155.01. That would be the largest share sale since SoftBank Group Corp. sold part of its stake in T-Mobile US Inc. in 2020, data compiled by Bloomberg show. The infusion of funds would clear one of new Chief Executive Officer Kelly Ortberg’s most urgent tasks. He is grappling with a balance sheet strained by years of turmoil and the fallout from a strike, now in its seventh week, that is crippling manufacturing of the company’s main cash cow, the 737 Max jetliner. Boeing needs the capital infusion to maintain its investment-grade rating and fund its production ramp-up once the walkout ends.
The company on Oct. 23 received clearance from the US Securities and Exchange Commission to sell as much as $25 billion of equity and debt. Boeing also has a separate new credit agreement in place for $10 billion, giving it “additional short-term access to liquidity as we navigate through a challenging environment.”
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