Boeing’s credit rating cut by S&P
Published 11:25 am Wednesday, July 29, 2009
Standard &Poor’s cut its ratings for the Boeing Co. and its finance arm on Wednesday, noting concerns about delays in Boeing’s 787 program as well as slowing air traffic and declining U.S. defense spending.
S&P downgraded Boeing Co. and Boeing Capital’s credit to “A” from “A+” on Wednesday.
“The downgrade reflects concerns about the possibility of further
production cuts due to airline order deferrals and cancellations, risks
related to the development of the midsize 787 jetliner, which is two years behind schedule, and the potential for higher customer financing needs,” said Standard &Poor’s credit analyst Christopher DeNicolo, in a statement.
“The long-term effect of changes in U.S. defense spending, and substantial pension liabilities were also factors,” he said.
S&P said it would negatively revise its outlook for Boeing again if the aerospace giant continues to receive cancellations or deferrals for commercial jets, which result in significant production cuts in 2010, or if Boeing further delays its 787 or 747-8.
