Moody's Ratings (Moody's Ratings) issued a statement on Wednesday to downgrade Boeing's credit rating from Baa2 to Baa3. The rating outlook is negative.
The statement said that the reduction in priority unsecured debt applicable to Boeing reflects “the insufficient performance of Boeing's commercial aircraft division.” Poor performance prevented free cash flow generation from reaching levels previously anticipated by credit rating agencies.
Moody's believes that the negative situation associated with this division will continue until at least 2026, and the company's annual free cash flow will be lower than the $4.3 billion debt due in 2025 and the $8 billion debt due in 2026. Moody's anticipates that Boeing will issue new bonds to fund these gaps.
After the news was announced, Boeing fell more than 3%.