Boeing removed from credit watch by S&P in turnaround boost
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The US plane maker remains somewhat insulated from the tariff turbulence rocking the global economy.
PHOTO: AFP
S&P Global Ratings said it is no longer considering cutting Boeing’s debt to junk status, citing the plane maker’s US$24 billion (S$31.4 billion) cash balance and other factors that give it a cushion to absorb future difficulties.
The ratings agency’s statement on April 28 is the latest sign of progress in Boeing’s turnaround after a brutal 2024.
The company last week posted first-quarter results that exceeded analyst forecasts. In October, it raised about US$24 billion of equity, and a month after that, a machinist union voted to end a crippling strike at the company’s factories.
These steps put the company on a clearer path to boosting production of its planes, a key step in Boeing’s efforts to return to financial health after a series of design and manufacturing problems grounded its planes and spurred regulators to clamp down on the company.
S&P said it is no longer actively considering cutting Boeing’s ratings, which are one step above junk status, at BBB-. The company “appears on track to recover from the 2024 strike-driven production halt and persistent manufacturing quality problems”, S&P said in its statement on April 28.
A downgrade would have pushed the plane maker’s borrowing costs up.
Boeing remains somewhat insulated from the tariff turbulence rocking the global economy, given the stockpile of parts that the company built up in 2024 when its factories were hobbled by the labour strife.
While China has reportedly told its national airlines to stop taking deliveries from Boeing, the company has said it will find other buyers for the planes that were on order. Still, the potential for trade turbulence to spread beyond China poses “a risk to additional deliveries” in 2025, S&P said.
Boeing is in the lowest tier of investment grade with all three major rating agencies, including Moody’s Ratings and Fitch Ratings. Moody’s affirmed that rating in January and removed the company from review for a downgrade, while Fitch never placed Boeing under review after the strike started.
Even with the shift this week, S&P is keeping a negative outlook on Boeing’s ratings, which means it still sees a risk of a downgrade in the medium term. BLOOMBERG
