Boeing has secured commitments of more than $12 billion in financing from more than a dozen banks as the industrial giant shores up its balance sheet amid the nearly yearlong grounding of the 737 Max following two fatal crashes, according to people familiar with the matter.
The manufacturer was trying to secure a loan of at least $10 billion, CNBC reported last week. Boeing declined to comment.
The two crashes — a Lion Air flight in Indonesia in October 2018 and an Ethiopian Airlines flight last March — together killed all 346 people on board. The crashes handed Boeing one of the biggest crises in its more than 100-year-history, one that has rippled through its supply chain and to its airline customers.
The size of the loan, at least $2 billion more than originally sought, is a vote of confidence in the manufacturer from lenders. Boeing is expected to detail its financing strategy when it reports earnings before the market opens on Wednesday.
The financing will be a two-year delayed-draw loan, the people said, meaning that Boeing doesn’t have to use it all immediately, and is set to cost 100 points over Libor.
The company suspended production of the planes, its best-selling aircraft, earlier this month. The timing of the jets’ return to service is still uncertain. Boeing last week said it doesn’t expect regulators to recertify the 737 Max again until mid-year but the head of the Federal Aviation Administration recently told airlines that the agency’s approval may come before that.
But new CEO Dave Calhoun told reporters last week that the company is planning to resume 737 Max production before the planes return to service.
