Boeing credit ratings placed on review for downgrade by Moody’s

Moody’s placed the Baa2 senior unsecured rating and Prime-2 short-term rating of Boeing on review for downgrade. The rating outlook was previously stable. “Placing the ratings on review for downgrade follows Moody’s belief that Boeing will be unable to deliver 737 narrow-body aircraft at the volumes required for it to materially expand its free cash flow and retire debt in a reasonable timeframe,” the ratings agency said in a statement. The aftereffects of the door plug ejection on Alaska Airlines flight 1282 on January 6, and investments in components and parts inventory in an attempt to reduce travelled work in the production of 737s will result in about $4.5B of negative free cash flow in Q1, it points out. Moody’s says Boeing’s cash will fall well below $10B come March 31.