Largest stock sale in history raises hope that aerospace giant can avoid credit downgrade 

Boeing sealed the largest ever stock sale by a US company and the fourth largest globally, raising $21.1 billion, as the company seeks to repair its balance sheet and avoid a damaging credit rating status to junk.  

$16.1 billion of the $21.1 billion, was raised through the selling of 112.5 million shares of common stock at a price of $143 each. An additional $5 billion was secured through the sale of securities holding interests in convertible preferred stock. 

The overall figure could swell by a further $3.2 billion, if as expected, banks led by Goldman Sachs exercise certain options. 

Boeing’s shares closed on $152.98 on Tuesday, up 1.5% on the day and 7% above the offer price, suggesting in the view of many analysts, that investors were confident that the deal addressed Boeing’s short-term funding issues. 

Credit rating agencies that had previously warned about a possible downgrade for Boeing, welcomed the news. 

“The offering is certainly favourable for credit quality. We’ll factor it in our assessment of the rating in the context of the continued negative free cashflow”, said Ben Tsocanos, aerospace director at S&P Global Ratings, as cited in Reuters. 

S&P had previously warned Boeing of a downgrade should Boeing’s cash balance fall below the $10 billion target, or if the company had to increase leverage to meet debt maturities, Reuters reported. 

Boeing has $11.5 billion of debt maturing through to Feb 1, 2025, and is committed to issuing $4.7 billion of its share to acquire Spirit AeroSystems and assume its debt.