Boeing is Reportedly In Discussions to Borrow $10 Million or More

As Boeing’s 737 Max dilemma continues, the company is reportedly in talks to borrow $10 million or more.

According to a CNBC report that cites people familiar with the matter, the company is in discussions with banks to secure a loan.

Citigroup, Bank of America Merrill Lynch, Wells Fargo and J.P. Morgan are banks that have already committed to contribute to the loan.

According to the people familiar with the situation, Boeing has already secured at least $6 million from the banks.

The total amount could rise if there is additional demand from banks, said one person familiar with the matter.

It was earlier this month that Jefferies forecast that Boeing would issue $5 billion in debt this quarter. It was also this month that the company suspended the production of troubled plans.

Boeing 737 Max jets are now going into their 11 month of being grounded. The company said it has no plans to lay off 737 Max workers and said they would be reassigned to other functions.

Boeing has developed a software fix for the 737 Max planes after a flight-control system was implicated in the crashes.
Regulators have yet to sign off on that or completed other checks that would allow them to certify the planes as safe to resume operations.

Moody’s Investors Service recently said it was putting Boeing’s credit rating review due to the Max issues.

“Recent developments suggest a more costly and protracted recovery for Boeing to restore confidence with its various market constituents, and an ensuing period of heightened operational and financial risk, even if certification of the Max comes relatively near-term, as expected,” wrote Moody’s lead Boeing analyst Jonathan Root.

Disclaimer: We have no position in Boeing Co (NYSE: BA) and have not been compensated for this article.