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morrisond
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Boeing raises $25B in new Debt sale

Thu Apr 30, 2020 6:26 pm

Arguably - not a great source - but it sounds like Boeing went way above the $10B they were looking for and sold $25B

https://www.zerohedge.com/markets/boein ... d-offering

This should get them through a few negative quarters of cash flow. I would guess no bailout now.

I was also surprised by how little they are intending to shrink the company (only about 10% according to previous reports).

This may be the aggressive Boeing that is looking at funding new developments and not shrinking too much.
 
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GEUltraFan9XGTF
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Re: Boeing raises $25B in new Debt sale

Thu Apr 30, 2020 6:36 pm

Too bad. I was hoping for bailout with strings attached, like jail time for execs, firing all senior and mid-level managers, moving the HQ back to Seattle.

Oh well, Boeing will never learn its lesson now. Still hoping for DOJ/FBI investigation and "MAX DEATH" jail time for execs.
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whatThe
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Re: Boeing raises $25B in new Debt sale

Thu Apr 30, 2020 6:59 pm

Confirmed by Bloomberg. Apparently over $70bln in orders for bonds which led Boeing to increase the offering to the quoted $25bln.
 
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par13del
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Re: Boeing raises $25B in new Debt sale

Thu Apr 30, 2020 9:07 pm

GEUltraFan9XGTF wrote:
Too bad. I was hoping for bailout with strings attached, like jail time for execs, firing all senior and mid-level managers, moving the HQ back to Seattle.

Oh well, Boeing will never learn its lesson now. Still hoping for DOJ/FBI investigation and "MAX DEATH" jail time for execs.

I would think this is the best of both worlds, the tax payers can take care of the industry who suffered due to Boeing malfeasance, while Boeing takes on massive debt and its stock goes to junk status thus removing Wall Street as a major mover and shaker in Boeing's future.
 
Turnhouse1
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Re: Boeing raises $25B in new Debt sale

Thu Apr 30, 2020 9:51 pm

$25Bn at base + 4.25% (or more) is over a Billion Dollars per year in interest, let alone repayments. Though probably better than the other options.
 
MIflyer12
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Re: Boeing raises $25B in new Debt sale

Thu Apr 30, 2020 10:15 pm

Where are those remarks, again, about Boeing not having the finances to undertake commercial aircraft development? ;)

Delta also had a debt offering that got expanded this week. They raised $3.5 Billion instead of the $1.5 Billion originally sought. There's a lot of money out there looking for investments. Recent yields on U.S. Treasury Inflation-Protected Securities (TIPS) have been negative.

https://www.marketwatch.com/story/delta ... 2020-04-30
 
morrisond
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 1:06 am

Boeing now confirming that they won't seek a bailout - https://www.cnbc.com/2020/04/30/boeing- ... l-aid.html
 
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Revelation
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 2:20 am

whatThe wrote:
Confirmed by Bloomberg. Apparently over $70bln in orders for bonds which led Boeing to increase the offering to the quoted $25bln.

Where are all those people saying Boeing is on the edge of bankruptcy?

They can screw up MCAS, build 400 planes with no deliveries, screw up KC46, watch their customers businesses tank due to a once in a life time pandemic, ask the market for $10bn, get offered $75bn and decide to take $25bn for now.

Now that is financial clout.
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Opus99
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 2:46 am

Revelation wrote:
whatThe wrote:
Confirmed by Bloomberg. Apparently over $70bln in orders for bonds which led Boeing to increase the offering to the quoted $25bln.

Where are all those people saying Boeing is on the edge of bankruptcy?

They can screw up MCAS, build 400 planes with no deliveries, screw up KC46, watch their customers businesses tank due to a once in a life time pandemic, ask the market for $10bn, get offered $75bn and decide to take $25bn for now.

Now that is financial clout.

couldn't have said it any better tbh. Well said lol!
 
wingman
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 2:47 am

From a risk perspective probably close to US Govt ratings, just knowing it’s a dead very they’d get bailed push come to shove, and bond holders always get paid first in liquidation or CH11. Nevertheless, that is an eye popping bond sale, maybe just enough to cover the MAX fubar virus.
 
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lightsaber
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 2:51 am

Revelation wrote:
whatThe wrote:
Confirmed by Bloomberg. Apparently over $70bln in orders for bonds which led Boeing to increase the offering to the quoted $25bln.

Where are all those people saying Boeing is on the edge of bankruptcy?

They can screw up MCAS, build 400 planes with no deliveries, screw up KC46, watch their customers businesses tank due to a once in a life time pandemic, ask the market for $10bn, get offered $75bn and decide to take $25bn for now.

Now that is financial clout.

That amount of money being available is amazing.

Bond holders are far more cynical than stock buyers. They see a future.

Lightsaber
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marcelh
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 4:08 am

They just need customers who are willing and able to buy new shiny toys
 
Waterbomber2
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 4:17 am

lightsaber wrote:
Revelation wrote:
whatThe wrote:
Confirmed by Bloomberg. Apparently over $70bln in orders for bonds which led Boeing to increase the offering to the quoted $25bln.

Where are all those people saying Boeing is on the edge of bankruptcy?

They can screw up MCAS, build 400 planes with no deliveries, screw up KC46, watch their customers businesses tank due to a once in a life time pandemic, ask the market for $10bn, get offered $75bn and decide to take $25bn for now.

Now that is financial clout.

That amount of money being available is amazing.

Bond holders are far more cynical than stock buyers. They see a future.

Lightsaber



It's not about seeing a future.
The Fed is buying corporate bonds galore, and banks, insurance companies and hedge funds are seeing free liquidity for instance through the repo market injections, so they are taking it and reinvesting it to make returns.

If someone offered you a 1 Billion loan for 0% interest, what would you do with it?
Buy Boeing corporate bonds at a coupon of 4.25% obviously.

https://www.reuters.com/article/us-usa- ... SKCN21W200

Basically, this is a direct (Fed corporate bond purchases) and indirect form of state aid, but allows Boeing to pretend that they didn't get state aid in front of Airbus or the WTO.

The fact that it was oversubscribed so much just means that the coupon rate was too high, they probably could have gotten the 25 Billions at 3%, so whichever bank they worked with didn't do their job right.

If I were Boeing, I would have taken the full 70 Billions USD though.
The Fed is going to have to cut back on the liquidity eventually to avoid high inflation, and this crisis is going to last a few years for Boeing, so they'll be needing the money.
 
max999
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 4:57 am

Revelation wrote:
whatThe wrote:
Confirmed by Bloomberg. Apparently over $70bln in orders for bonds which led Boeing to increase the offering to the quoted $25bln.

Where are all those people saying Boeing is on the edge of bankruptcy?

They can screw up MCAS, build 400 planes with no deliveries, screw up KC46, watch their customers businesses tank due to a once in a life time pandemic, ask the market for $10bn, get offered $75bn and decide to take $25bn for now.

Now that is financial clout.


I don't see it as financial clout. I interpret this as the market recognizes Boeing is too big to fail.

The investors know no matter how badly Boeing screws up, their investments will be safe as the government WILL bail out Boeing at the end of the day.
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Sokes
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 6:33 am

The real question here is who subscribed the bonds?
FED: crony capitalism unless bought according to rules that treat all companies equal, e.g. bond purchase by FED on request from company up to 20% of assets. (Boeing has 143 billion $ assets, so 25 billion $ is 17,5%.)

Investment banks: as long as they get credit for near zero and get paid 4,25% interest, management gets good bonuses. If Boeing can't pay back? Well, it's not the managers' private wealth that is affected.
Also if investment banks want to be bailed out whenever needed, they can't reject politicians the favor to buy (peanuts) 25 billion $ bonds from Boeing. Which would again be crony capitalism.

However if it's private investors it may indicate
a) a sound company or
b) a too big to fail company

After 2008 and 2020, will there be any faith left in "everybody deserves equal chances" or "rule of law"?
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Opus99
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 6:42 am

max999 wrote:
Revelation wrote:
whatThe wrote:
Confirmed by Bloomberg. Apparently over $70bln in orders for bonds which led Boeing to increase the offering to the quoted $25bln.

Where are all those people saying Boeing is on the edge of bankruptcy?

They can screw up MCAS, build 400 planes with no deliveries, screw up KC46, watch their customers businesses tank due to a once in a life time pandemic, ask the market for $10bn, get offered $75bn and decide to take $25bn for now.

Now that is financial clout.


I don't see it as financial clout. I interpret this as the market recognizes Boeing is too big to fail.

The investors know no matter how badly Boeing screws up, their investments will be safe as the government WILL bail out Boeing at the end of the day.

That is exactly what financial clout is as revelation has defined above
 
JayinKitsap
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 7:13 am

Well compared to some real estate like the Vegas Strip or downtown NYC, 25B doesn't seem like a huge number. Heck, EK has over 25B in planes in its fleet. Yes, as noted above it is really the Fed printing money and lending it out at 0% to the investment banks and similar sharks. The market is probably around 3% but what would it appear if the offering didn't reach the target, better to pay an extra 1.25% to move people from lending to the 4,000 room casino etc, The lenders fully know that Boeing's market value backstops these loans.

Seems really cheap compared to the pain and suffering with government involvement, much less the WTO subsidy hassle. It may force Airbus to do similarly, at this time do the French and German governments in a position to invest 25 B Euros into Airbus? EU bonds may be easier, done in a similar manner.
 
Sokes
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 7:31 am

From a March 30 report to Congress about a March 22 decision by FED:
"Eligible corporate bonds and loans must meet each of the following criteria at the time of bond purchase or loan origination:
(i) issued by an eligible issuer;
(ii) issued by an issuer that is rated at least BBB-/Baa3 by a major nationally recognized statistical rating organization (NRSRO) and, if rated by multiple major NRSROs, rated at least BBB-/Baa3 by two or more NRSROs, in each case subject to review by the Federal Reserve; and
(iii) have a maturity of four years or less. "
https://www.federalreserve.gov/publicat ... -29-20.pdf

News outlets call that investment grade. We know from 2008 what is considered investment grade by rating agencies.
Great that companies get help depending on rating agencies' opinion. Is the FED not smart enough to find better criteria?
It would be interesting to know who bought what type of bonds in the week before the decision. If the FED purchases bonds from companies rated BBB-, I bet some well connected people will make a good profit out of it.
As usual: there are reasons why the super rich outperform the average investor.
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jeffrey0032j
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 7:34 am

marcelh wrote:
They just need customers who are willing and able to buy new shiny toys

And customers they have, they even managed to deliver a 787 to UA this month. Considering the shutdown in operations, this was beyond expectations.
 
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MrBren
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 7:43 am

4,25% interest rate ... crazy and stupid from Boeing.
 
jeffrey0032j
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 9:15 am

Sokes wrote:
RJMAZ wrote:
Revelation wrote:
Where are all those people saying Boeing is on the edge of bankruptcy?

They can screw up MCAS, build 400 planes with no deliveries, screw up KC46, watch their customers businesses tank due to a once in a life time pandemic, ask the market for $10bn, get offered $75bn and decide to take $25bn for now.

Now that is financial clout.

I have been saying this for 6 months and provided excellent evidence and my posts kept getting reported and deleted by admin. The Airbus guys do not want to accept cold hard facts and always start diverting the topic from cashflow to 787 program accounting.

Boeing was in a far better financial position than Airbus 12 months ago so this is not surprising me at all. Yes Boeing is taking a much bigger hit with 737MAX but their foundation was so damn strong.

I believe Revelation meant to say it's Boeing's political power, not damn strong foundation, which enables them to raise money easily.
Mind to expand why their foundation before Max was damn strong?

If their political power was as strong as you think, they would have gotten federal handouts way earlier on, but no, they have not and are not planning to do so now. This is unlike Airbus where the political forces have a substantial stake in the company, which by the way, is reported to be asking for government help one month after they have said they didn't it.

Financial markets are where free market forces come to play, if they don't have good fundamentals, nobody would be investing any cent in their bonds or stock.

Boeing, is much more diversified, and a much larger company than Airbus, and has survived more storms and crisis in much worse ways than Airbus in their history. They have proved to be a resilient company in many ways. These are the fundamentals you are looking for.
 
RJMAZ
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 9:47 am

Sokes wrote:
RJMAZ wrote:
I have been saying this for 6 months and provided excellent evidence and my posts kept getting reported and deleted by admin. The Airbus guys do not want to accept cold hard facts and always start diverting the topic from cashflow to 787 program accounting.

Boeing was in a far better financial position than Airbus 12 months ago so this is not surprising me at all. Yes Boeing is taking a much bigger hit with 737MAX but their foundation was so damn strong.

I believe Revelation meant to say it's Boeing's political power, not damn strong foundation, which enables them to raise money easily.
Mind to expand why their foundation before Max was damn strong?

Boeing spent $43.4 billion on share buy backs between June 2013 and the first 737MAX crash.

Dividends total $ 24.6 billion in the last decade.

Source: https://www.fr24news.com/a/2020/04/boei ... eturn.html

Now this is extremely high and nearly unprecedented. It is multiples of Airbus. Considering they both sell a similar volume of aircraft the profit from Boeing is unusually high in both the commercial and space/military sides.

Even after they produced 400 undelivered 737 aircraft the profit for that quarter only just went negative. So the rest of the company generated enough profit to cover 400 737's.

I honestly can not tell you what parts of Boeing has such a high profit margin. It could be servicing.
 
jeffrey0032j
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 9:52 am

jeffrey0032j wrote:
Sokes wrote:
RJMAZ wrote:
I have been saying this for 6 months and provided excellent evidence and my posts kept getting reported and deleted by admin. The Airbus guys do not want to accept cold hard facts and always start diverting the topic from cashflow to 787 program accounting.

Boeing was in a far better financial position than Airbus 12 months ago so this is not surprising me at all. Yes Boeing is taking a much bigger hit with 737MAX but their foundation was so damn strong.

I believe Revelation meant to say it's Boeing's political power, not damn strong foundation, which enables them to raise money easily.
Mind to expand why their foundation before Max was damn strong?

If their political power was as strong as you think, they would have gotten federal handouts way earlier on, but no, they have not and are not planning to do so now. This is unlike Airbus where the political forces have a substantial stake in the company, which by the way, is reported to be asking for government help one month after they have said they didn't it.

Financial markets are where free market forces come to play, if they don't have good fundamentals, nobody would be investing any cent in their bonds or stock.

Boeing, is much more diversified, and a much larger company than Airbus, and has survived more storms and crisis in much worse ways than Airbus in their history. They have proved to be a resilient company in many ways. These are the fundamentals you are looking for.

Adding on to this, Boeing's worst crisis almost threatened an entire city. Remember the "Will the last person leaving Seattle - turn out the lights" billboard? Since then, Seattle has looked to diversify its economy to be less reliant on Boeing, Seattle now has Starbucks, Microsoft and Amazon as the other big economic players. Less political might now for Boeing than before.

Airbus has not had any crisis of that scale before. My opinion is Airbus does very well during the good times, but I doubt they are as prepared for crisis as Boeing. I would struggle to think what will happen to Toulouse if Airbus goes or downsizes to the extent of Boeing's 1970s bust, which is why I think political forces in France will never let Airbus fail, by hook or by crook.

Further complicating the dynamics is the 737 Max crisis, which had forced Boeing to get into crisis mode way earlier than Airbus had, and to stop 737 Max production, reduce overheads and preserve cash, it was pure luck in this case, but it probably allowed Boeing to be a better position in this crisis than Airbus.
 
RJMAZ
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 10:11 am

jeffrey0032j wrote:
Airbus has not had any crisis of that scale before. My opinion is Airbus does very well during the good times, but I doubt they are as prepared for crisis as Boeing. I would struggle to think what will happen to Toulouse if Airbus goes or downsizes to the extent of Boeing's 1970s bust, which is why I think political forces in France will never let Airbus fail, by hook or by crook.

Airbus having production split over multiple countries is a huge disadvantage at the moment. When the borders are shut and certain countries in the supply line still have the virus spreading it makes things very difficult.

The 1970's and 1980's saw many maufacturer merge or go out of business. Boeing didn't really have a perfect run. They have merged with McDonald Douglas and they simply kept the Boeing name.
 
Sokes
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 12:51 pm

RJMAZ wrote:
Boeing spent $43.4 billion on share buy backs between June 2013 and the first 737MAX crash.

Dividends total $ 24.6 billion in the last decade.

Source: https://www.fr24news.com/a/2020/04/boei ... eturn.html

I agree it looks impressive. People like myself critical with Boeing believe from this nearly 70 billion $ 20 billion $ should have been used to pay for early production losses (as Airbus does) and another 20 billion $ was needed for equity. Boeing before the MAX crisis had only 400 mio $ equity. That's a joke. Thanks to generous dividends and share repurchases in 2019 now it's -9,6 billion $ equity.
I generally dislike share repurchases as it changes ownership in the company. If Boeing had to spend 30 billion $ on dividends (and no share buybacks) last decade nobody would grumble. We would all be impressed and Boeing had +10 billion $ equity .

RJMAZ wrote:
Even after they produced 400 undelivered 737 aircraft the profit for that quarter only just went negative. So the rest of the company generated enough profit to cover 400 737's.

I honestly can not tell you what parts of Boeing has such a high profit margin. It could be servicing.

It sounds amazing. It sounds too good to be true. That's because it is too good to be true.

Look at p.84, https://s2.q4cdn.com/661678649/files/do ... Report.pdf
"Accrued liabilities" increased from 14,8 to 22,9 billion $.
7,4 billion of this increase is explained by "737 MAX customer concessions and other considerations".
Nice way to avoid losses. Just pay later and book it under "accrued liabilities". It's the "deferred production cost" philosophy. Do you agree that a company can just keep increasing accrued liabilities without increasing equity? If you don't, you have to deduct another 23 billion $.
So for a healthy balance sheet Boeing only had 7, not 70 billion $ to spend for dividends and share buybacks in the last decade.
Why can't the world be a little bit more autistic?
 
morrisond
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 1:10 pm

MrBren wrote:
4,25% interest rate ... crazy and stupid from Boeing.


it was the underlying treasury yield + 4.25%. Maybe not so crazy and stupid depending on what they do later. This is still relatively cheap Capital for Boeing. I suspect a few years from now when the share price recovers (if it does and we don't have a Global depression) they will do an equity issue to pay back the majority of the money. I have not read the details of the offering but I suspect Boeing has the ability to buy it back at some premium in the future. This will be a lot cheaper than issuing stock now.

I highly doubt it was the Fed purchasing any bonds in the offering - they could buy them later - but as Boeing was able to get financing so easily no need to support Boeing by buying bonds in the secondary Market either. But given that Blackrock is managing the Corporate Bond program for the FED and most likely would have bought some of the bonds in the offerings for it's own non-government investment funds - I highly doubt they won't be supporting the issues in the secondary market if required with the Fed's money. No conflict there at all.....

Being oversubscribed is not unusual - you want to be at 2-3x anyways, so investors feel good as the Bonds will probably appreciate in the aftermarket and will do it again if you need more money.

The real question will be what do they do with this money? I'm pretty sure they won't need all of it to get through.

Why are they only reducing BCA/Services and head office headcount by 15%. That seems like way too little - unless they are going aggressive and intend to press forward on new developments.

In the past in tough times that is when Boeing has had an advantage. Due to Airbus's bigger challenge to reduce in size they tend to do worse in downturns - but as I said I'm confused why Boeing is only reducing Headcount by 15% in those divisions. Production levels would indicate lower employment - so if the majority is in Production personnel - maybe the Engineers are being kept around to work on/start new programs.

This could mean that a clean sheet FSA/NSA/NMA or whatever is coming and a lot sooner than we were guessing. This would jive with getting out of the EMB purchase.

Whatever tube they pick I suggest it's probably going to be a 2 wing program.
 
morrisond
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 1:19 pm

Sokes wrote:
RJMAZ wrote:
Boeing spent $43.4 billion on share buy backs between June 2013 and the first 737MAX crash.

Dividends total $ 24.6 billion in the last decade.

Source: https://www.fr24news.com/a/2020/04/boei ... eturn.html

I agree it looks impressive. People like myself critical with Boeing believe from this nearly 70 billion $ 20 billion $ should have been used to pay for early production losses (as Airbus does) and another 20 billion $ was needed for equity. Boeing before the MAX crisis had only 400 mio $ equity. That's a joke. Thanks to generous dividends and share repurchases in 2019 now it's -9,6 billion $ equity.
I generally dislike share repurchases as it changes ownership in the company. If Boeing had to spend 30 billion $ on dividends (and no share buybacks) last decade nobody would grumble. We would all be impressed and Boeing had +10 billion $ equity .

RJMAZ wrote:
Even after they produced 400 undelivered 737 aircraft the profit for that quarter only just went negative. So the rest of the company generated enough profit to cover 400 737's.

I honestly can not tell you what parts of Boeing has such a high profit margin. It could be servicing.

It sounds amazing. It sounds too good to be true. That's because it is too good to be true.

Look at p.84, https://s2.q4cdn.com/661678649/files/do ... Report.pdf
"Accrued liabilities" increased from 14,8 to 22,9 billion $.
7,4 billion of this increase is explained by "737 MAX customer concessions and other considerations".
Nice way to avoid losses. Just pay later and book it under "accrued liabilities". It's the "deferred production cost" philosophy. Do you agree that a company can just keep increasing accrued liabilities without increasing equity? If you don't, you have to deduct another 23 billion $.
So for a healthy balance sheet Boeing only had 7, not 70 billion $ to spend for dividends and share buybacks in the last decade.


And again buying back $30B in stock or paying it out in dividends is effectively the same other than affecting per share share numbers. Boeing is in the same financial position. It has the same financial resources and will have the same cash flow going forward.

That being said I wish they had spent that $30B on new programs - but that is another discussion.

I would have to guess Airbus's equity position will go negative soon as well - that does not concern me at all as it does not affect it's future cash flow. This will not affect their ability to get new financing.
 
Sokes
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 2:32 pm

I forgot: p.63, https://s2.q4cdn.com/661678649/files/do ... Report.pdf :
"Commercial aircraft programs inventory includes deferred production costs and supplier advances.
Deferred production costs represent actual costs incurred for production of early units that exceed the
estimated average cost of all units in the program accounting quantity. Higher production costs are
experienced at the beginning of a new or derivative airplane program. Units produced early in a program
require substantially more effort (labor and other resources) than units produced later in a program because
of volume efficiencies and the effects of learning. We expect that these deferred costs will be fully recovered
when all units included in the accounting quantity are delivered as the expected unit cost for later deliveries
is below the estimated average cost of all units in the program."

That refers to the famous 20 billion deferred production costs for B787. It's under inventories, which is an asset.
Critics say it isn't an asset. Airbus in it's account considers these initial high costs as costs to be paid for in the quarter.
It's not the developing cost of a plane with or without prototype and it's not tooling. Both these costs are also considered an asset by Airbus.
IIRC Boeing increased deferred production costs up to 500 frames or so. The peak was 32,4 billion $ in 2016. Since then around 12 billion $ of accumulated costs were paid back, 20 billion $ remaining.


I made a mistake. I argued:
a) 20 billion $ equity is required to pay for deferred production costs B787
b) 23 billion $ accrued liabilities should have equity to cover it.
c) 20 billion $ is required to bring equity from -9,7 to +10,3 billion $.
In sum, 63 billion too much dividends and share buybacks over the last 10 or so years.

a) Assets would shrink from 143,1 billion $ to 123,1 billion $, as deferred production costs as well as equity disappears from the books. These assets would be financed by 133 billion $ liabilities and -10 billion $ equity. (Today: 143 = 153 - 10)
b) If accrued liabilities are paid, e.g. by paying compensation to airlines for the MAX, assets as well as liabilities would shrink by 23 billion $. Boeing wouldn't have cash left to pay bills. So this is not an option.
Instead 23 billion equity is needed which would increase assets by 23 billion $ as cash. But if this cash is used to pay for the accrued liabilities, assets again will be 123 billion $. Liabilities now are 110 billion $ and equity is +13 billion $.

This is good enough. The 20 billion $ from c) are not required. So Boeing should have used 27 instead of 70 billion $ over the last 10 years for dividends to have an acceptable balance sheet. I would prefer another 10 billion $ equity extra, but 11% equity ratio is acceptable.
Why can't the world be a little bit more autistic?
 
whatThe
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 2:55 pm

For a bit of context about how bond issuances work for the discussion (a bit off topic):

The banks running the deal will go out with an initial price (in this case interest rate) for the bonds. Investors (pension funds, insurance companies, mutual funds, hedge funds, other types of investors) will place orders based on that price guidance. In this case, it is highly likely the price guidance was very cheap to where existing Boeing bonds traded to generate interest. For example, the existing 10yr bonds may have been trading at a 4% interest rate and the initial guidance may have been for new 10yr bonds to be issued at 4.75%. That makes the new bonds attractive.

After a while, the banks will look at the order book. If demand is very high (as mentioned, 2-3x or greater) the issuer may decide to (a) issue more bonds at the initial guidance, (b) have the price guidance lowered to be more favorable to the issuer, or (c) some combination of the above. In this case, they opted for (c).

For context, typically investors pad their orders and do not want to receive their entire order size. In reality, they may only get 10-50% of the order they placed as banks and the issuer decide who to allocate bonds to based on customer relationships and other factors. So the 75bln shouldn't necessarily be viewed as the "real" demand and investors would have likely been upset if all 75bln were issued with the bonds immediately trading worse (though that is no longer Boeing's immediate problem).
 
Bricktop
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 3:09 pm

marcelh wrote:
They just need customers who are willing and able to buy new shiny toys

You gotta be in it to win it.
 
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Revelation
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 5:29 pm

max999 wrote:
The investors know no matter how badly Boeing screws up, their investments will be safe as the government WILL bail out Boeing at the end of the day.

If this were the case they'd keep the stock buybacks going AND cancel the layoffs AND keep making more MAXes AND go ahead with NMA AND go ahead with NSA AND start a clean sheet 777 replacement ala Y3. Also buying some country clubs for corporate outing centers would be nice. I've been an IBMer and I've been to an IBM Country Club and it's a nice perk, if I do say so myself.

The reality is Boeing is not on the edge of bankruptcy AND they can't be SURE the government will bail them out nor do they want to be government owned or controlled so they have to use some prudence on choosing what they spend money on.

A lot of us wish it was more on product development and less on keeping the stock price high, but in the end they are a corporation and their ability to do things like issue billions of dollars of bonds when the sh*t hits the fan depends on the investing community being engaged in the stock and being confident that the people running the corporation know where their interests lie. Also, like it or not, a stock with a good ROI helps attract and retain key employees. Here in the US we don't get pensions, so smart employees who understand that they'll need to fund their own retirement are on the lookout for such. I think the corporate types abuse this because they grant themselves ridiculous amounts of shares, but this is the system we live in here in the good old USA.
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par13del
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 5:36 pm

Revelation wrote:
whatThe wrote:
Confirmed by Bloomberg. Apparently over $70bln in orders for bonds which led Boeing to increase the offering to the quoted $25bln.

Where are all those people saying Boeing is on the edge of bankruptcy?

They can screw up MCAS, build 400 planes with no deliveries, screw up KC46, watch their customers businesses tank due to a once in a life time pandemic, ask the market for $10bn, get offered $75bn and decide to take $25bn for now.

Now that is financial clout.

Boeing or the investors willing to put up their money?
That would be a more interesting topic, since they like us have seen everything that has taken place the last couple years, and since a number of them are new investors, they should not have much inside knowledge. So what do these people know that the rest of us don't?
 
Gremlinzzzz
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 5:37 pm

Revelation wrote:
max999 wrote:
The investors know no matter how badly Boeing screws up, their investments will be safe as the government WILL bail out Boeing at the end of the day.

If this were the case they'd keep the stock buybacks going AND cancel the layoffs AND keep making more MAXes AND go ahead with NMA AND go ahead with NSA AND start a clean sheet 777 replacement ala Y3. Also buying some country clubs for corporate outing centers would be nice. I've been an IBMer and I've been to an IBM Country Club and it's a nice perk, if I do say so myself.

The reality is Boeing is not on the edge of bankruptcy AND they can't be SURE the government will bail them out nor do they want to be government owned or controlled so they have to use some prudence on choosing what they spend money on.

A lot of us wish it was more on product development and less on keeping the stock price high, but in the end they are a corporation and their ability to do things like issue billions of dollars of bonds when the sh*t hits the fan depends on the investing community being engaged in the stock and being confident that the people running the corporation know where their interests lie. Also, like it or not, a stock with a good ROI helps attract and retain key employees. Here in the US we don't get pensions, so smart employees who understand that they'll need to fund their own retirement are on the lookout for such. I think the corporate types abuse this because they grant themselves ridiculous amounts of shares, but this is the system we live in here in the good old USA.

Boeing will have huge military contracts to fall back on though. Those are safe for as long as the dollar remains worldwide unit of trade and it is what will help them weather this storm as was the case when the bought McDonnell Douglas.
 
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 5:39 pm

RJMAZ wrote:
Airbus having production split over multiple countries is a huge disadvantage at the moment. When the borders are shut and certain countries in the supply line still have the virus spreading it makes things very difficult.

Boeing depends on a global supply chain for its production lines too. So do do its suppliers, and their suppliers.
 
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 5:44 pm

Waterbomber2 wrote:

It's not about seeing a future.
The Fed is buying corporate bonds galore, and banks, insurance companies and hedge funds are seeing free liquidity for instance through the repo market injections, so they are taking it and reinvesting it to make returns.

So do we need to see the actual investors to determine whether this is in fact state aid or just private citizens taking a stake in a private company?
Is there no private investors in the world anymore, government is everything?
 
Checklist787
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 5:50 pm

Opus99 wrote:
Revelation wrote:
whatThe wrote:
Confirmed by Bloomberg. Apparently over $70bln in orders for bonds which led Boeing to increase the offering to the quoted $25bln.

Where are all those people saying Boeing is on the edge of bankruptcy?

They can screw up MCAS, build 400 planes with no deliveries, screw up KC46, watch their customers businesses tank due to a once in a life time pandemic, ask the market for $10bn, get offered $75bn and decide to take $25bn for now.

Now that is financial clout.

couldn't have said it any better tbh. Well said lol!


Totaly agree!!!
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Do it! "...
 
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 6:02 pm

There is financial clout. And there is financial arrogance. The latter has ruined Boeing - in most ways but its stock price - since the 77W program wrapped up and the 7E7 program started.
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morrisond
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 6:04 pm

par13del wrote:
Revelation wrote:
whatThe wrote:
Confirmed by Bloomberg. Apparently over $70bln in orders for bonds which led Boeing to increase the offering to the quoted $25bln.

Where are all those people saying Boeing is on the edge of bankruptcy?

They can screw up MCAS, build 400 planes with no deliveries, screw up KC46, watch their customers businesses tank due to a once in a life time pandemic, ask the market for $10bn, get offered $75bn and decide to take $25bn for now.

Now that is financial clout.

Boeing or the investors willing to put up their money?
That would be a more interesting topic, since they like us have seen everything that has taken place the last couple years, and since a number of them are new investors, they should not have much inside knowledge. So what do these people know that the rest of us don't?


New Investors aren't buying the bonds - generally those are all bought by institutions who in general know what they are doing or at least have a pretty sophisticated financial education.
 
Checklist787
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 6:11 pm

morrisond wrote:
.

In the past in tough times that is when Boeing has had an advantage. Due to Airbus's bigger challenge to reduce in size they tend to do worse in downturns - but as I said I'm confused why Boeing is only reducing Headcount by 15% in those divisions. Production levels would indicate lower employment - so if the majority is in Production personnel - maybe the Engineers are being kept around to work on/start new programs.

This could mean that a clean sheet FSA/NSA/NMA or whatever is coming and a lot sooner than we were guessing. This would jive with getting out of the EMB purchase.


Indeed, you can hope for it now.
They will look at the post-covid future

morrisond wrote:
Whatever tube they pick I suggest it's probably going to be a 2 wing program.


Or a "2 tubes program" , or "2 tubes-2 wings program" for SMALL Airplanes and MOM Airplanes for a futur HUUUGE market.

I suspect a launch in 2022 for 2029-2030 EIS for the first version...
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Do it! "...
 
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Stitch
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 6:40 pm

marcelh wrote:
They just need customers who are willing and able to buy new shiny toys


Ryanair appears to be referring back to their post-9/11 playbook and planning a large 737-10 order at...rapacious...prices.


par13del wrote:
Boeing or the investors willing to put up their money?


Both.


par13del wrote:
That would be a more interesting topic, since they like us have seen everything that has taken place the last couple years, and since a number of them are new investors, they should not have much inside knowledge. So what do these people know that the rest of us don't?


The only investors able to put up eight to ten figures worth of capital to buy that many bonds have a very large body of knowledge.

It's how they generated that money in the first place. ;)
 
Jetport
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 7:41 pm

Sokes wrote:
RJMAZ wrote:
Boeing spent $43.4 billion on share buy backs between June 2013 and the first 737MAX crash.

Dividends total $ 24.6 billion in the last decade.

Source: https://www.fr24news.com/a/2020/04/boei ... eturn.html

I agree it looks impressive. People like myself critical with Boeing believe from this nearly 70 billion $ 20 billion $ should have been used to pay for early production losses (as Airbus does) and another 20 billion $ was needed for equity. Boeing before the MAX crisis had only 400 mio $ equity. That's a joke. Thanks to generous dividends and share repurchases in 2019 now it's -9,6 billion $ equity.
I generally dislike share repurchases as it changes ownership in the company. If Boeing had to spend 30 billion $ on dividends (and no share buybacks) last decade nobody would grumble. We would all be impressed and Boeing had +10 billion $ equity .



You cannot use cash to pay for early production losses. Those are paper losses and you can't use cash to cover paper/accounting losses, there is no one to pay the cash to. The cash would have just sat in the bank if Boeing had not used it on dividends and buybacks, and investors would wonder why a company would sit on tens of billions of dollars making close to zero return on it. They could have also spent the money on new/upgraded aircraft development or acquisitions, but they could not have used cash to cover early production losses, since they are just paper/balance sheet losses.

I don't know why so many folks on A.Net cannot understand the difference between accounting/paper gains and losses vs. cash.

You can play lots of tricks with your balance sheet and accounting gains/losses, it is much harder to play games with cash. That is why most investors pay little attention to profit and loss, and focus on cash flow.
 
MrBretz
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 8:23 pm

As a side note I saw somewhere the S&P on Wednesday lowered its credit rating for Boeing to BBB-minus, one step above junk. And even if they slip a bit into junk status, it will be on the top end of junk or, as they say, quality junk. And I believe all the US airlines bonds are rated junk.
 
Waterbomber2
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Re: Boeing raises $25B in new Debt sale

Fri May 01, 2020 9:00 pm

morrisond wrote:
MrBren wrote:
4,25% interest rate ... crazy and stupid from Boeing.


it was the underlying treasury yield + 4.25%. Maybe not so crazy and stupid depending on what they do later. This is still relatively cheap Capital for Boeing. I suspect a few years from now when the share price recovers (if it does and we don't have a Global depression) they will do an equity issue to pay back the majority of the money. I have not read the details of the offering but I suspect Boeing has the ability to buy it back at some premium in the future. This will be a lot cheaper than issuing stock now.

I highly doubt it was the Fed purchasing any bonds in the offering - they could buy them later - but as Boeing was able to get financing so easily no need to support Boeing by buying bonds in the secondary Market either. But given that Blackrock is managing the Corporate Bond program for the FED and most likely would have bought some of the bonds in the offerings for it's own non-government investment funds - I highly doubt they won't be supporting the issues in the secondary market if required with the Fed's money. No conflict there at all.....

Being oversubscribed is not unusual - you want to be at 2-3x anyways, so investors feel good as the Bonds will probably appreciate in the aftermarket and will do it again if you need more money.

The real question will be what do they do with this money? I'm pretty sure they won't need all of it to get through.

Why are they only reducing BCA/Services and head office headcount by 15%. That seems like way too little - unless they are going aggressive and intend to press forward on new developments.

In the past in tough times that is when Boeing has had an advantage. Due to Airbus's bigger challenge to reduce in size they tend to do worse in downturns - but as I said I'm confused why Boeing is only reducing Headcount by 15% in those divisions. Production levels would indicate lower employment - so if the majority is in Production personnel - maybe the Engineers are being kept around to work on/start new programs.

This could mean that a clean sheet FSA/NSA/NMA or whatever is coming and a lot sooner than we were guessing. This would jive with getting out of the EMB purchase.

Whatever tube they pick I suggest it's probably going to be a 2 wing program.


2-3 times oversubscribed can happen, still not ideal.
Boeing was aiming for 10B and they were offered 70B.

What matters is indeed what they do with it.
Imo this may not be enough to get throught the ugly next 2 years after the last 2 not so pretty years.
Should have taken the full 70B or at least 50B.
I doubt that there will be room for a new development. The market will be oversupplied until 2025 and we don't even know how the dynamics will change after all the nationalisations going on.
National airlines loved the quads...
 
Sokes
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Re: Boeing raises $25B in new Debt sale

Sat May 02, 2020 5:12 am

Jetport wrote:
You cannot use cash to pay for early production losses. Those are paper losses and you can't use cash to cover paper/accounting losses, there is no one to pay the cash to.
...
they could not have used cash to cover early production losses, since they are just paper/balance sheet losses.

Boeing thinks otherwise. I had already quoted it. Here again:
Sokes wrote:
I forgot: p.63, https://s2.q4cdn.com/661678649/files/do ... Report.pdf :
"Commercial aircraft programs inventory includes deferred production costs and supplier advances.
Deferred production costs represent actual costs incurred for production of early units that exceed the
estimated average cost of all units in the program accounting quantity. Higher production costs are
experienced at the beginning of a new or derivative airplane program. Units produced early in a program
require substantially more effort (labor and other resources) than units produced later in a program because
of volume efficiencies and the effects of learning.
...



Jetport wrote:
I don't know why so many folks on A.Net cannot understand the difference between accounting/paper gains and losses vs. cash.

You can play lots of tricks with your balance sheet and accounting gains/losses, it is much harder to play games with cash. That is why most investors pay little attention to profit and loss, and focus on cash flow.

Considering the share price before MAX grounding, I'm sure a lot of people share your opinion.
From my experience there is no way to judge unless one is willing to read the annual report. The really interesting infos (what are inventories? what are accrued liabilities?) are in the notes.

Cash flow is not useful to evaluate a company. Thanks to the bond issue Boeing will have great cash flow this quarter.

But the best metric is still "return on investment":
company A has ten million $ equity and makes two million $ profit
company B has one million $ equity and two million $ profit
company C has no equity and one million $ profit.
Company C has best return on investment. Company B is also very good. Company A is worst.

Sorry, but I really can't understand according to which criteria people evaluate the value of a company. I must admit I haven't been a successful investor. For if the majority goes into loss, politics changes the rules. Near zero interest, quantitative easing and what not. The function of central banks is to prevent rich people paying for their gambling losses. Therefore: The trend is your friend!
You are probably a better investor than myself. But I disagree what you say about playing games with profit versus cash flow. It's very easy to play with cash flow if there is a central bank which is willing to buy bonds just above junk value and that value decided by rating agencies with their fabulous track record. It's not so easy to play with profit. Though I have to agree that it's more easy in GAAP with deferred costs.
Why can't the world be a little bit more autistic?
 
marcelh
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Re: Boeing raises $25B in new Debt sale

Sat May 02, 2020 8:04 am

Stitch wrote:
marcelh wrote:
They just need customers who are willing and able to buy new shiny toys


Ryanair appears to be referring back to their post-9/11 playbook and planning a large 737-10 order at...rapacious...prices.


True, but will Boeing “give away” planes in this new environment? FR growth predictions won’t be the same AC and they to absorb those MAX10 they have to get rid of “some” 738NG’s
 
Sokes
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Re: Boeing raises $25B in new Debt sale

Sat May 02, 2020 8:08 am

This forum is international. We basically don't speak about the same topic.
Accrual accounting in a German ear sounds like fake accounting.

"65% of governments will report on an accrual basis by the end of 2023 – today, that figure stands at 25%. With many of these changes happening in Asia, Africa, Latin America and the Caribbean, accrual accounting will encourage these governments to report their finances in a more transparent and culpable manner.
Most European countries either use the accrual method already or are in a process of transition – with the exception of Germany, the Netherlands and the Republic of Ireland, as well as some southern Slavic countries such as Serbia and Bulgaria. By 2023, Serbia is projected to have adopted the accrual system along with Portugal (which is in a transitional phase at present)."
https://www.accountancyineurope.com/art ... ive-years/

Boeing expects to have to pay compensation to Max customers. It adds a few billion $ to accrued liabilities. I believe at the time the MAX are delivered these liabilities are deducted from the cash flow these planes make.
I believe in the cash accounting method Boeing would have to build up provisions. These provisions are deducted from profit the quarter they are formed.
Similar if the company expects that there will be increased pension obligations, the company in cash accounting has to make a provision. It is deducted from profit the same quarter.
How can Boeing know if they will be a profitable company when pension obligations become due?

Similar deferred production costs of B787 are an asset in accrual accounting. The "asset" is depreciated as planes are delivered. While the idea is not wrong, it depends on assumptions to be fulfilled. What if the buyer market turns into a seller market? Boeing increased the number of planes in the assumption as more planes got sold.
Now that the market turns, will Boeing adjust it's assumption about cash flow/ plane and number of planes to be sold? Should they do this before or after issuing bonds? How much of the 20 billion $ will they have to expense at that moment?

What should be the minimum equity ratio in accrual accounting and what in cash accounting?

Is it wrong to call accrual accounting "prophecy accounting"?

The US is far too successful to dismiss it as rubbish. But I can never agree to this type of accounting.
Why can't the world be a little bit more autistic?
 
LJ
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Re: Boeing raises $25B in new Debt sale

Sat May 02, 2020 9:45 am

Stitch wrote:
marcelh wrote:
They just need customers who are willing and able to buy new shiny toys


Ryanair appears to be referring back to their post-9/11 playbook and planning a large 737-10 order at...rapacious...prices.


Is this the same Ryanair which announced they intend to defer part of their MAX order this week? Seems more that it's going in the direction of a swap (MAX200 for MAX10 with long lead times)

https://www.aljazeera.com/ajimpact/ryanair-lay-3000-staff-reduces-flight-capacity-200501100521655.html
https://finance.yahoo.com/news/ryanair-sets-mid-may-deadline-092641061.html
 
morrisond
Topic Author
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Re: Boeing raises $25B in new Debt sale

Sat May 02, 2020 2:12 pm

Waterbomber2 wrote:
morrisond wrote:
MrBren wrote:
4,25% interest rate ... crazy and stupid from Boeing.


it was the underlying treasury yield + 4.25%. Maybe not so crazy and stupid depending on what they do later. This is still relatively cheap Capital for Boeing. I suspect a few years from now when the share price recovers (if it does and we don't have a Global depression) they will do an equity issue to pay back the majority of the money. I have not read the details of the offering but I suspect Boeing has the ability to buy it back at some premium in the future. This will be a lot cheaper than issuing stock now.

I highly doubt it was the Fed purchasing any bonds in the offering - they could buy them later - but as Boeing was able to get financing so easily no need to support Boeing by buying bonds in the secondary Market either. But given that Blackrock is managing the Corporate Bond program for the FED and most likely would have bought some of the bonds in the offerings for it's own non-government investment funds - I highly doubt they won't be supporting the issues in the secondary market if required with the Fed's money. No conflict there at all.....

Being oversubscribed is not unusual - you want to be at 2-3x anyways, so investors feel good as the Bonds will probably appreciate in the aftermarket and will do it again if you need more money.

The real question will be what do they do with this money? I'm pretty sure they won't need all of it to get through.

Why are they only reducing BCA/Services and head office headcount by 15%. That seems like way too little - unless they are going aggressive and intend to press forward on new developments.

In the past in tough times that is when Boeing has had an advantage. Due to Airbus's bigger challenge to reduce in size they tend to do worse in downturns - but as I said I'm confused why Boeing is only reducing Headcount by 15% in those divisions. Production levels would indicate lower employment - so if the majority is in Production personnel - maybe the Engineers are being kept around to work on/start new programs.

This could mean that a clean sheet FSA/NSA/NMA or whatever is coming and a lot sooner than we were guessing. This would jive with getting out of the EMB purchase.

Whatever tube they pick I suggest it's probably going to be a 2 wing program.


2-3 times oversubscribed can happen, still not ideal.
Boeing was aiming for 10B and they were offered 70B.

What matters is indeed what they do with it.
Imo this may not be enough to get throught the ugly next 2 years after the last 2 not so pretty years.
Should have taken the full 70B or at least 50B.
I doubt that there will be room for a new development. The market will be oversupplied until 2025 and we don't even know how the dynamics will change after all the nationalisations going on.
National airlines loved the quads...


I take it you have never worked in Corporate Finance before - 2-3x is perfect. Upsizing from $10B to $25B is almost unheard of. If they wanted to go to $50B then they probably would have had to start from scratch again.

I would have guessed a lot of questions were asked by investors even when they upsized from $10B to $25B.

They are already through the past year (it hasn't been two ugly years yet) and the $25B should be more than enough to get them through. They will just downsize more if necessary and assuming that MAX RTS they have 400 Frames they still need to be paid for which will produce significant cash flow. Maybe not as much as before - but most of it is probably sunk cost already so anything above what they owe to suppliers at this point is gravy from a cash flow standpoint.
 
morrisond
Topic Author
Posts: 2791
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Re: Boeing raises $25B in new Debt sale

Sat May 02, 2020 2:21 pm

Sokes wrote:
Jetport wrote:
You cannot use cash to pay for early production losses. Those are paper losses and you can't use cash to cover paper/accounting losses, there is no one to pay the cash to.
...
they could not have used cash to cover early production losses, since they are just paper/balance sheet losses.

Boeing thinks otherwise. I had already quoted it. Here again:
Sokes wrote:
I forgot: p.63, https://s2.q4cdn.com/661678649/files/do ... Report.pdf :
"Commercial aircraft programs inventory includes deferred production costs and supplier advances.
Deferred production costs represent actual costs incurred for production of early units that exceed the
estimated average cost of all units in the program accounting quantity. Higher production costs are
experienced at the beginning of a new or derivative airplane program. Units produced early in a program
require substantially more effort (labor and other resources) than units produced later in a program because
of volume efficiencies and the effects of learning.
...



Jetport wrote:
I don't know why so many folks on A.Net cannot understand the difference between accounting/paper gains and losses vs. cash.

You can play lots of tricks with your balance sheet and accounting gains/losses, it is much harder to play games with cash. That is why most investors pay little attention to profit and loss, and focus on cash flow.

Considering the share price before MAX grounding, I'm sure a lot of people share your opinion.
From my experience there is no way to judge unless one is willing to read the annual report. The really interesting infos (what are inventories? what are accrued liabilities?) are in the notes.

Cash flow is not useful to evaluate a company. Thanks to the bond issue Boeing will have great cash flow this quarter.

But the best metric is still "return on investment":
company A has ten million $ equity and makes two million $ profit
company B has one million $ equity and two million $ profit
company C has no equity and one million $ profit.
Company C has best return on investment. Company B is also very good. Company A is worst.

Sorry, but I really can't understand according to which criteria people evaluate the value of a company. I must admit I haven't been a successful investor. For if the majority goes into loss, politics changes the rules. Near zero interest, quantitative easing and what not. The function of central banks is to prevent rich people paying for their gambling losses. Therefore: The trend is your friend!
You are probably a better investor than myself. But I disagree what you say about playing games with profit versus cash flow. It's very easy to play with cash flow if there is a central bank which is willing to buy bonds just above junk value and that value decided by rating agencies with their fabulous track record. It's not so easy to play with profit. Though I have to agree that it's more easy in GAAP with deferred costs.


Cash Flow is not useful to evaluating a company? Tell that to almost every professional investor and watch them laugh in your face. Net Earnings are a lot easier to manipulate. Who knows what Airbus actually earns on a net Basis as they exclude so much from the calculation that it is almost impossible to figure it out. But they are not unique in this matter.

So Company D which has negative equity would be even better as they made something on Negative - that is even more efficient.

You are confusing cash flow including cash flow from financing activities with Operating Cash Flow.
 
StTim
Posts: 3733
Joined: Thu Aug 08, 2013 7:39 am

Re: Boeing raises $25B in new Debt sale

Sat May 02, 2020 7:40 pm

This is airinsights take on the $25bn financing and it is not the positive spin of some above.

https://airinsight.com/boeings-debt-wil ... k-thereof/


I am not an avid reader of airinsight but I have not marked them out as anti Boeing so far.

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Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos