Boeing Won’t Seek Further Funding From The US Government

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Boeing has now confirmed that since it raised $25 billion from its bond offering yesterday, it will not be seeking any further funding from the US government. The aviation manufacturer said market interest was strong enough to imply the company had long-term support. The announcement comes just a day after the company reported a $641 million loss for the first quarter of the year.

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Boeing’s public offering raised enough money for it to not require more government aid despite a Q1 loss of $641 million. Photo: Boeing.

Public offering

Despite having to announce such a significant loss for its Q1 results, Boeing is ending the week on a much more positive note than expected. The manufacturer managed to raise a decent $25 billion from a bond offering on Thursday, which means it does not need to rely on further financial support from the US government.

The public offering includes seven tranches of bonds maturing between 2023 and 2060. However, no interest rate notes were included in the filing. In a statement, Boeing said,

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The robust demand for the offering reflects strong support for the long-term strength of Boeing and the aviation industry.”

Boeing believes the public offering will be completed next week by the 4th of May. The amount raised comes in addition to the $17 billion in financial aid from the US government’s CARES act. A total of $2 trillion has been set aside to help companies overcome the impact of the outbreak. The government asked businesses to declare if they required more aid by the end of Friday, so this announcement from Boeing is not a surprise.

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Boeing has been forced to cut 10% of its workforce as factories halt production. Photo: Boeing

A tough week for Boeing

Boeing may be ending on a slightly positive note, but it hasn’t been a great week for them. Not only did they report their significant losses for the first part of the year, but they were also forced to announce it needed to cut 10% of its workforce.

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The manufacturer also had its credit rating downgraded this week as the impact of the grounded MAX planes continues to plague the company. Having said this, their rating is still in the investment grade. Boeing also suffered a minor legal defeat this week as its appeal to move a law case to the US federal courts was denied.

Good news for the future

Despite the negatives, Boeing has also shown some positive signs for the future. Everyone was sort of expecting the loss announcement for Q1. It’s a reflection of the state of the industry in general at this time. Boeing’s problems are, of course, exacerbated by continuing issues surrounding the MAX jets, and all the legal issues that come with that. But it did win a big vote of confidence this week which should give it hope for the future.

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Boeing still has several ongoing legal issues surround its MAX jets, including one with pilots of Southwest airlines. Photo: Getty

It is also showing signs of recovering from some of the damage done to its reputation by the MAX crisis. Earlier today, we reported that Ryanair, a key customer for Boeing’s 737 line, was hoping to finalize a deal for more of the problematic jets. Additionally, the test program for the 777X is also steaming ahead. The second aircraft joined the program yesterday.

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What do you think about Boeing’s current situation? Are we starting to see more positive signs for the future? Or do you think it is too soon to tell? Would you be happy investing in Boeing? Let us know your thoughts in the comments.

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