Boeing closes in on $15 billion financing via stock, hybrid bonds

(Reuters) – Boeing is closing in on a plan to raise around $15 billion with common shares and a mandatory convertible bond as the jet maker bolsters finances worsened by a crippling strike, four sources familiar with the matter told Reuters.

The company on Tuesday said in regulatory filings that it could raise as much as $25 billion in stock and debt with its investment-grade credit rating at risk. One of the sources cautioned that a $15 billion sale may not be enough for Boeing to fix its ongoing crises.

Boeing on Tuesday also announced a $10 billion credit agreement with major lenders – Bank of America, Citibank, Goldman Sachs and JPMorgan – as it tries to work out of a production and regulatory crisis.

Boeing was not immediately available for comment.

Four investor and banking sources said representatives from those lenders were inquiring about appetite for a combined offering of new shares and a mandatory convertible bond – a hybrid bond that could convert into equity on or before a predetermined date.

Roughly $10 billion in new shares are being contemplated to be sold by the company along with nearly $5 billion in mandatory convertible bonds, the sources said.

One of the four sources said the deal was scheduled to be priced shortly after Boeing’s Oct. 23 third-quarter earnings report. But another investor source said the company was trying to avoid a raise during the middle of the month-old strike which analysts estimate is costing tens of millions of dollars per day.

(Reporting by Shankar Ramakrishnan and Echo Wang in New York, Tim Hepher in Paris and Allison Lampert in Montreal; Editing by David Gaffen and Matthew Lewis)