Bond Buyers for Boeing

The Story:

Boeing, one of the globe’s largest aerospace manufacturers, and a pillar of the economy of Washington State, appeared to be in real trouble in mid-March, and it was lobbying for subsidies from the US federal government. It appears now to have turned things around, with the benefit of indirect support, but without any actual cash, from the government. Boeing now says it no longer seeks a cash infusion.


Boeing’s troubles were not entirely due to the Coronavirus (though that did undermine the airlines which are critical customers.) Boeing was hurt first by a string of accidents involving its flagship aircraft, the 737 MAX narrow body, which among much else forced the resignation of former CEO Dennis Mullenburg in December 2019.

The Thing to Know: 

President Trump made it clear in April that he wan’t going to “let anything happen to Boeing.” The idea that the government was ready to serve as a backstop was enough to rescue Boeing. As April ended, the company sold $70 billion in bonds. This was an amazing turnaround, and suggests Boeing will have the liquidity necessary to get through its current troubles.

Speculators who often gamble on so-called “junk” or high-yield/high-risk bonds were eager to buy Boeing, which they see as junk returns but only ‘investment grade’ risk.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.