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Boeing has been downgraded by a notch to Baa3 from Baa2 by Moody’s. The downgrade comes on back of the weak operating performance in the Commercial Airplanes segment of the company, leading to lower free cash flow generation. Moody’s expects that weakness in the segment will persist till 2026 and the company’s annual free cash flow will fall short of $4.3bn of debt coming due in 2025. Boeing has been in the news recently with it receiving poor grading from an FAA audit last month after a fuselage panel blew-off in a Boeing 737 Max-9 airline mid-flight earlier in January this year. These events have impacted its 737 aircraft production and sales.
Boeing’s bonds were stable with its 3.25% 2028s at 90.6 cents on the dollar, yielding 6.09%.