WionDrive News Desk 
Boeing is advancing a strategy to raise approximately USD 15 billion through a combination of common shares and a mandatory convertible bond, as the aerospace giant grapples with financial pressures exacerbated by an ongoing strike, sources familiar with the matter told Reuters. The company indicated in regulatory filings on Tuesday that it could potentially raise up to USD 25 billion in stock and debt, with its investment-grade credit rating now at risk.
In addition to the stock and bond offerings, Boeing is exploring a structured finance transaction that could secure up to USD 5 billion, possibly through the securitisation of revenue from one of its subsidiaries. The company has not publicly commented on this specific plan.
Boeing has faced significant challenges, including heightened regulatory scrutiny and production constraints, following a midair incident earlier this year involving a 737 MAX aircraft. While shares rose by 1% on Wednesday, they remain down over 40% for the year.
The jetmaker has been burning through cash, prompting the recent decision to tap capital markets. Additionally, Boeing secured a USD 10 billion credit agreement with major lenders, including Bank of America, Citibank, Goldman Sachs, and JPMorgan.
Industry sources report that these lenders are gauging interest in a combined offering of new shares and the mandatory convertible bond, which could convert to equity at a predetermined date. Plans include issuing about USD 10 billion in new shares and nearly USD 5 billion in convertible bonds.
The timing for this capital raise remains uncertain. While one source suggested pricing could occur shortly after Boeing’s third-quarter earnings report on October 23, another indicated the company might delay until after the labor strike ends, which analysts estimate is costing the company tens of millions daily.
Despite a lower-than-expected cash burn in the third quarter, Boeing may need to act soon to protect its investment-grade rating. The anticipated funding will likely cushion the impact on existing shareholders, as new equity could dilute their ownership. The hybrid nature of the convertible bonds makes them more favorable for existing shareholders, allowing for a delay in stock conversion at a premium price.
