Boeing raises $5bn

Boeing has successfully raised $5bn in bond and loan financing as it boosts liquidity, perhaps in anticipation of further costs/losses caused by the grounding of the 737 Max aircraft. The airframe manufacturer has issued five trances of senior unsecured notes totalling $3.5bn and a $1.5bn short-term loan.

The notes are offered in five tranches: $600m three-year notes (due 2022) priced at 2.700%, which will yield 52 basis points (bps) over US Treasuries; $650m seven-year notes (due 2026) priced at 3.100% with a yield of T+75bps;$600m 10-year notes (due 2029) priced at 3.200% with a T+85bps spread; $850m notes due 2034 with a 3.600% coupon and T+112bps spread; and $800m 30-year notes (due 2049) with a 3.900% coupon and T+107bps spread. Reports state that the spreads tightened following the launch of the offering due to demand. Boeing states that it will use the proceeds for general corporate purposes.

Joint bookrunners for the 2022 notes are Citi, Mizuho, Société Générale (SG), BBVA, Commerzbank and US Bancorp. Joint bookrunners for the 2026 notes are Citi, Credit Agricole CIB (CACIB), MUFG, Barclays, Deutsche Bank and Lloyds. Joint bookrunners for the 2029 notes are Citi, BofA Merrill Lynch, JPMorgan, Deutsche Bank, Morgan Stanley and SunTrust Robinson Humphrey. Joint bookrunners for the 2034 notes are Citi, SMBC, Wells Fargo, Credit Suisse, RBC and Santander. Joint bookrunners for the 2049 notes are Citi, BNP Paribas, Goldman Sachs, Barclays, Morgan Stanley and Santander.

Separately, Boeing has also secured a $1.5bn sort-term financing with joint lead arrangers and joint bookrunners Citi, JPMorgan and Merrill Lynch. JPMorgan and Bank of America acted as syndication agents and Citi acted as administration agent. Under the Short Term Credit Agreement, Boeing will pay a fee of 0.04% per annum. The sort term loan, which terminates on October 20, 2019, has a 364-day extension period and can be converted into a term loan and raised to $3.3bn.