Boeing apparently is in discussions with several banks in an effort to secure a $10 billion loan to help it deal with the costs related to the suspension of production of the 737-Max airplane after two fatal crashes.
Boeing is in talks with banks to secure a loan of $10 billion or more, according to people familiar with the matter, as the company faces rising costs stemming from two fatal crashes of its 737 Max planes. The company has secured at least $6 billion from banks so far, the people said, and is talking to other lenders for more contributions. The total amount could rise if there is additional demand from banks, one person familiar with the matter said.
Liquidity isn’t an immediate concern, analysts have said, but the new debt shows Boeing is shoring up its finances amid the cash-sapping fallout of the two crashes — one in Indonesia in October 2018 and another in Ethiopia in March last year — that killed all 346 people aboard the two flights.
The amount Boeing is seeking to borrow is more than what some analysts were expecting. For example, Jefferies earlier this month forecast Boeing would issue $5 billion in debt this quarter.
I must emphasize that this story relies on anonymous sources, and is reported by CNBC, a division of NBC, one of today’s least reliable news sources.
More trustworthy information should become available on January 29, when Boeing makes its next earnings report.