In just six weeks, Boeing Co went from seeking government aid to announcing it no longer needed it.
FILE PHOTO: The company logo and trading informations for Boeing is displayed on a screen on the floor of the New York Stock Exchange in New York, U.S., March 13, 2019. REUTERS/Brendan McDermidThe upsized deal, this year’s largest investment-grade bond issue and the sixth largest on record, surpassed Boeing’s expectations. It underscores how the Chicago-based company capitalized on U.S. government support, even without having to accept taxpayer money as aid.
Boeing itself had lobbied extensively for aid and had called for at least $60 billion in government loans for the entire aerospace manufacturing sector. “We can’t let anything happen to Boeing,” U.S. President Donald Trump said last month, in one of the many instances he expressed support for the company.
Already saddled with $39 billion in debt as of the end of March, Boeing started the week searching for cash, to cope not just with impact of the coronavirus outbreak on air travel, but with the long grounding of its flagship 737 Max aircraft as well, following a string of accidents. Then Boeing had a breakthrough. Its plan was to gauge investor interest for a bond issue of between $10 billion and $15 billion, according to people familiar with the deliberations. Yet demand for the bonds on Thursday peaked at more than $70 billion from over 600 investor accounts, according to the sources.
Boeing priced different bond tranches spanning several maturities at between 450 basis points and 593 basis points, whereas the average spread for bonds of Boeing’s credit rating is 306 basis points, according to ICE BofA Data.
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