Research Update: Boeing Co. 'A-' Issuer Credit Rating On CreditWatch Negative Due To Additional MAX Delays

Boeing recently announced that the 737 MAX would likely not return to service until the summer of 2020, which will result in higher costs and cash outflows and further delay an improvement in credit ratios. We placed the 'A-' long-term issuer and unsecured debt ratings on the aerospace and defense company on CreditWatch with negative implications. We affirmed the 'A-2' short-term and commercial paper ratings and did not place them on CreditWatch. We will resolve the CreditWatch placement once we have more clarity as to when Boeing will be able to resume deliveries, how many aircraft it can deliver each month, when it will resume production and at what rate, and more information on the additional costs for airline compensation

...- Boeing recently announced that the 737 MAX would likely not return to service until the summer of 2020, which will result in higher costs and cash outflows and further delay an improvement in credit ratios. - We placed the 'A-' long-term issuer and unsecured debt ratings on the aerospace and defense company on CreditWatch with negative implications. - We affirmed the 'A-2' short-term and commercial paper ratings and did not place them on CreditWatch. - We will resolve the CreditWatch placement once we have more clarity as to when Boeing will be able to resume deliveries, how many aircraft it can deliver each month, when it will resume production and at what rate, and more information on the additional costs for airline compensation and other items. We could take additional rating actions as developments warrant. Any downgrade would likely be limited to one notch....

Research Update