Boeing taps debt market to raise $10b, sources say

Boeing Monday tapped debt markets to raise $10b, after the US planemaker burned $3.93b in free cash during Q1 as production of its best-selling jet declined, sources familiar with the matter said. Boeing shares rose 3.4% after the successful sale. Ratings agencies last week slashed the outlook on Boeing's credit to just above "junk" status. On Monday, both assigned ratings nearing junk to Boeing's new senior unsecured notes, with S&P assigning a BBB- rating and Moody's a Baa3 rating. Boeing has been dealing with heightened regulatory scrutiny and other fallout from a midair blowout of a cabin panel door plug on a nearly new 737 MAX 9 in January. The planemaker is carrying the burden of multiple sequential crises from deadly crashes of two 737 MAX jets to the deep slump in travel during the pandemic. Now a 737 MAX production shock first reported by Reuters has weakened its balance sheet and left it under a cumulative debt pile. Investors and analysts had predicted Boeing would tap bond markets to get ahead of more than $12b in combined debt coming due in 2025 and 2026. At the same time, US fixed income markets have seen a huge supply rush of new bonds in recent months as companies looked to capitalize on relentless demand from investors seeking to lock in higher yields in a year when the Federal Reserve is expected to start cutting interest rates. 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.<br/>