Boeing’s long-term credit rating was downgraded two notches at Fitch Ratings, which cited the "rapid escalation" of the coronavirus pandemic and the effect it's having on the airframe makers business.
Boeing’s rating is still investment grade but now hovers just two levels over "junk" status. Fitch lowered the rating to BBB from A-.
Additionally the outlook for the rating is negative, given the risks of a more extended coronavirus pandemic, ongoing risks related to the timing of the return to service of the currently grounded 737 MAX planes and the expected pace of the 737 MAX delivery ramp once the grounding is lifted.
According to Fitch, Boeing's debt had doubled in 2019 to around $27 billion, and will continue to rise in 2020, potentially peaking at $45 billion.
In the case of a prolonged COVID-19 impact, or material delays on the 737 MAX's return of service, Fitch expects Boeing to need access to additional capital, which could further pressure the company's credit profile.
Additionally Boeing had to suspend production at its Puget Sound facilities which manufacture the 787 and 777, along with the 767 and 747 on March 23, following Covid 19.
Despite this suspension, and the ongoing technical problems it is suffering with the 787 MAX, most recently debris in the fuel tanks of parked planes, Boeing is looking to restart production of the airplane as early as May.
Boeing suspended production of the airplane in January as there is still no clear timeframe for the MAX to be certified to return to service, however, according to Reuters Boeing has asked some supplier to be ready to move parts in April, in expectation of a May production restart.
The story was confirmed to Reuters by Boeing’s chief financial officer who said the airframe maker was planning a “slow, methodical, systematic approach”, to restarting production of the MAX in May.