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The Boeing logo is displayed at its Renton factory, where the Boeing 737 MAX aircraft are built in Renton, Washington on April 20, 2020.
JASON REDMOND | AFP via Getty Images
Boeing said Thursday it would not seek federal help to resist the coronavirus pandemic after the aerospace giant obtained a whopping $ 25 billion in a bond offer, the company’s biggest debt sale.
The offer includes seven tranches with maturities ranging from three to 40 years, the company said.
“As a result of the response, and pending the closing of this transaction expected on Monday, May 4, we do not plan to seek additional financing through the capital markets or the options of the United States government at this time,” he said in a statement.
Boeing last month requested $ 60 billion in federal aid for itself and its supply chain, which includes General Electric and Spirit Aerosystems.
The $ 2.2 billion in federal coronavirus relief that Congress approved last month set aside $ 17 billion in federal loans for companies deemed to be of national security interest, a bill that Boeing fits. Boeing CEO Dave Calhoun opposed the possibility of providing the government with a capital stake in exchange for federal aid, but this week he said all options were on the table.
The company ended the quarter with $ 15.5 billion in cash.
Both Boeing and its main rival Airbus are facing the biggest crises in their history, as demand for new aircraft has evaporated in the pandemic. The gloomy environment for new passenger aircraft and aircraft services is making Boeing more dependent on its defense arm.
Boeing was quick to shore up liquidity and recently withdrew a loan of nearly $ 14 billion. Chief Executive Calhoun told investors on Wednesday that the company is “intensely focused on ensuring liquidity through the immediate crisis.”
Boeing is cutting 10% of the workforce representing some 160,000 people at the end of last year and cutting production of planes, including the 787 Dreamliner. Calhoun said this week it would probably take two to three years for travel demand to return to 2019 levels.
The pandemic is a new crisis for the company that was already struggling with the consequences of two fatal accidents in its 737 Max that killed 346 people on flights. Regulators around the world have landed the plane since March 2019 and it is unclear when its flight will be authorized again.
Some 737 Max buyers, such as Southwest Airlines, are deferring orders, but Boeing is also registering an increasing number of cancellations of the planes, which had been its best-selling aircraft.
