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Boeing CFO says markets essentially closed to new debt

Kitco News

SEATTLE (Reuters) - Boeing Co’s (BA.N) chief financial officer said on Tuesday that the U.S. planemaker was not in discussions to raise new debt as the coronavirus pandemic batters global aviation.

“Not right now. The markets essentially are closed,” Boeing CFO Greg Smith told Reuters by phone. “I mean, there’s really not much opportunity to raise any additional debt. That’s one of the challenges.”

Boeing has sought $60 billion in U.S. government loans for itself and the aerospace industry. Congress could reach agreement on a stimulus and rescue package worth up to $2 trillion to respond to the massive economic damage from the coronavirus pandemic as soon as today.

Asked if Boeing could grant warrants or options under a bailout deal, Smith added that the broader U.S. aerospace supply chain needs access to credit.

“Having access to the credit markets is really important for us right now,” he said.

He said the company was already seeing some recovery in China, hard hit initially by the fast-spreading coronavirus.

Smith also said a tie-up with Brazil planemaker Embraer (EMBR3.SA) remained strategically important to the company.

A slump in Embraer shares and cash concerns at Boeing driven by the impact of the coronavirus on air travel dealt a blow to the deal’s fragile economics.

Reporting by Eric M. Johnson in Seattle; Editing by Steve Orlofsky

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