Boeing put on CreditWatch at S&P as implications from ongoing strike weigh
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8 hours ago
Wolterk
- An ongoing strike at Boeing (NYSE:BA) is threatening the aerospace company’s credit rating at S&P, with the potential it could be lowered to junk status.
- S&P estimates that the strike is costing Boeing $1B per month and projects the company will burn through $10B in cash in 2024 — assuming the strike ends in Q4. The credit ratings agency anticipates that Boeing will end the year below its cash balance target of $10B.
- Boeing currently has a “BBB-” issuer credit rating.
- S&P also sees Boeing pursuing “incremental funding” and issuing additional equity. “However, we believe the company remains exposed to higher-than-expected cash usage and adjusted debt for the next year or two, which could further delay the expected recovery in its credit measure to levels we view as consistent with the rating.”
- In addition, S&P sees Boeing’s goal of manufacturing 38 737 MAX planes per month likely not happening until mid 2025.