Boeing Raises $10 Billion in Debt Amid 737 MAX Issues

On Monday, Boeing raised $10 billion in debt markets amid production declines and cash burn, as ratings agencies slashed its credit outlook to near-junk status due to ongoing 737 MAX issues. The planemaker is dealing with heightened regulatory scrutiny, the fallout from a 737 MAX incident in January.

The bond sale was used to boost liquidity ahead of maturities on Boeing's existing debt load, including $4.3 billion in 2025. The deal received orders nearly eight times the offering size, indicating strong investor demand despite the company's challenges. Boeing will use the proceeds to increase its liquidity as it navigates the current crises.

Ratings agencies assigned ratings nearing junk status to Boeing's new senior unsecured notes, reflecting the company's still strong business profile but ongoing weak performance in commercial aircraft. Moody's said the rating reflects Boeing's still-strong business profile, which continues to mitigate ongoing weak performance in commercial aircraft, although headwinds surrounding the division could persist through 2026.

Why this matters: Boeing's ability to raise significant debt amid its current challenges shows the company's still-strong standing in the market. However, the near-junk credit ratings highlight the precarious position Boeing finds itself in as it works to overcome the 737 MAX crisis and weather the unprecedented downturn in air travel caused by the pandemic.

Bloomberg analyst Matthew Geudtner noted that Boeing has the tools to defend its investment-grade status and the negative outlooks give the company at least 12 months to show progress in normalizing operations. The successful bond sale provides Boeing with additional liquidity to manage its debt maturities and navigate the ongoing headwinds facing the commercial aviation industry.

Key Takeaways

• Boeing raised $10B in debt amid production declines and cash burn.
• Ratings agencies slashed Boeing's credit outlook to near-junk status.
• The bond sale received orders nearly 8 times the offering size.
• Boeing's credit rating hovers above 'junk' status, with access to $10B credit.
• The successful bond sale provides Boeing with liquidity to manage debt and headwinds.