Boeing Co. BA,
they returned to the corporate bond market Tuesday with financing of up to four components that they plan to use to repay debt.
The aerospace and defense giant wants to use the new BBB – level Baa2 debt finance to withdraw at least part of $ 13.8 billion on a 2 – year loan facility, according to someone with direct knowledge of the contracts.
The final size of the fund has not yet been confirmed, but analysts at CreditSights estimate it could reach $ 14 billion, which would match Apple Inc..’s AAPL,
$ 14 billion corporate bond issued Monday as the largest such deal so far this year.
Read: Apple sees blow on demand for $ 14 billion debt deal
An early price talk on Boeing’s shortest 2-year fixed rate parcel emerged in the range of 130 base points across US Treasurys TMUBMUSD02Y,
although the longest 5-year fixed rate class was applied to investors in a range of 195 basis points over the risk-free criterion.
“Even if we were to accept half-price discounts,” wrote CreditSights chief analyst Ashwin Tiruvasu, the bonds would still offer new “attractive” issue discounts of about 25 basis points on the bonds. was due in 2023 and almost 30 basis points on the outstanding debts in 2024 and 2026.
Investors earn a spread, or minimum price, on corporate bonds that are above Financial criteria levels. That level is often linked to where the company’s outstanding debt is trading on the market, as well as investors ’perceptions of the underlying risk of the issuer’s view.
Boeing reported last week a fourth-quarter loss that stretched to more than $ 8 billion, losing expectations by a broad margin, while revenues fell slightly less than expected, amid strong strength. defense, space and security industry.
The company also agreed in early January to pay $ 2.5 billion to settle U.S. fraud charges over their 737 Max program.
Shares of Boeing rose nearly 3% on Tuesday as equity investors turned their focus in anticipation of more fiscal support from Congress and the spread of the vaccine, following the recent real growth of retail sales in stocks that were about to good scarce. The S&P 500 SPX,
rose 1.7% at noon, while the Dow Jones industrial average DJIA,
it was up nearly 2%.
Read: Boeing is a ‘COVID-19 revival play,’ ‘Morgan Stanley says