Please ensure Javascript is enabled for purposes of website accessibility

Boeing Raises $25 Billion in Fresh Debt

By Lou Whiteman – Apr 30, 2020 at 3:50PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company is scrambling to add to its liquidity ahead of a potentially prolonged commercial aerospace slump.

Boeing (BA 0.07%) on Thursday successfully raised $25 billion in fresh liquidity via a bond sale, more than doubling the size of its planned offering after receiving robust interest in the debt.

The aerospace giant was said to be working with a range of investment banks on a reported $10 billion bond sale, but according to CNBC's David Faber, Boeing raised the size of its offering after finding interest in upwards of $70 billion worth of the debt. Boeing has already fully drawn down a $14 billion term loan and has suspended its dividend in an effort to preserve cash and ride out a COVID-19 pandemic-prompted slowdown in airline traffic.

Earlier this week, Boeing said that its total debt grew by 42% in the first quarter compared to year's end. The company burned through $4.7 billion in the first quarter and expects to continue to bleed cash at least until its 737 Max is cleared to resume flying, which will not happen before the third quarter at the earliest.

A Boeing Dreamliner in flight.

Image source: Boeing.

The fund raising is important to make sure Boeing remains solvent, but there is no quick solution to the problems facing the company. CEO David Calhoun during a post-earnings call with investors said he expects it to take "two to three years" for travel to return to 2019 levels, and "a few years beyond that" before the airline industry really returns to growth.

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Boeing Company Stock Quote
The Boeing Company
BA
$132.20 (0.07%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
339%
 
S&P 500 Returns
109%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.