“Fitch also expects there will be a lingering operating-margin impact for several years after the 737 Max returns to service,” the ratings company said. Fitch’s rating on Boeing is the sixth-highest investment-grade level.
Boeing’s bonds were unchanged after Fitch’s report. The cost to protect its debt against default for five years rose 2.2 basis points, according to data provider CMA.
The company’s benchmark 10-year bond has traded higher since the March 10 crash of the Ethiopian Airlines jet, the second Max accident in a five-month span. The notes were last quoted at 103 cents on the dollar, according to Trace. Boeing was able to sell $3.5 billion of new debt in April, boosting the size of the transaction amid strong demand.
The shares fell 1% to $373.70 at 1:04 p.m. in New York.
Boeing is rated A2 by Moody’s Investors Service and an equivalent A from S&P Global Ratings, the sixth-highest investment-grade rating. Both carry stable outlooks.
S&P said last week that Boeing’s announcement that it will be taking a $5.6 billion pretax charge to compensate for the grounding of the 737 Max wouldn’t affect the company’s credit ratings. But S&P warned that more damaging effects to Boeing’s finances or a “substantial loss” in market share to the 737 could warrant a downgrade.
Regulators around the world banned the plane from flying in March after the Ethiopia crash, the second in five months for the new version of the workhorse 737. A total of 346 people died in the two accidents.