Boeing ‘buying time and capital’ with today’s moves, says BofA

BofA notes that Boeing issued an S-3 worth up to $25B – including senior debt, subordinated debt, common stock, preferred stock, depository shares, stock purchase contracts, and stock purchase units – early Tuesday morning in a shelf registration that will be valid for up to three years and may include the issuance of the above-mentioned securities. As part of the shelf, Boeing entered into a $10B credit agreement with a consortium of banks, says the analyst, who has noted previously that the firm expected Boeing to issue $10B-$15B in equity to maintain its investment grade credit rating and expected strong demand from the equity issuance. While the size of the offering has yet to be disclosed, the firm looks at the extended timeline as “a positive,” adding that it expects Boeing to offer equity first, which should shore up the company’s balance sheet in the near term, while maintaining the option to later issue equity debt with a lower risk of a credit downgrade. BofA maintains a Neutral rating on Boeing shares as the full details of the mixed shelf remain to be priced and securities issued.