Moody’s considers downgrading Boeing’s credit rating

Moody’s Investors Service said that it is considering lowering Boeing’s current rating at “Baa2” (not guaranteed) and also its short-term rating at Prime-2.

The agency said: “Putting the rating under review in order to downgrade the rating comes after Moody’s believes that Boeing will not be able to deliver the 737 “narrow-body” aircraft in the quantities required to significantly expand its free cash flow and repay debts within a reasonable time frame.” As reported by Al Arabiya.

The Baa2-backed long-term revenue bonds and VMIG 2-backed short-term revenue bonds, issued by the Industrial Development Authority, have also been placed under review for downgrade.

The US plane maker is facing a growing crisis following a mid-air panel explosion in January on board a 737 MAX plane, which led to a radical change in its management on Monday.

Boeing pointed to a comment last week from CFO Brian West who said: “The path to stable financials is a stable factory and that’s what we’re focused on now.”

Boeing said in a statement on Monday that CEO Dave Calhoun will step down at the end of 2024, while Chairman Larry Kellner will not run for re-election. Stan Dale, who leads Boeing’s commercial aircraft division, will also retire effective immediately. COO Stephanie Pope will assume Dale’s role, the company said.

The 737 MAX crisis has led to growing customer frustration with Calhoun and Dell as the crisis centered around the aircraft maker’s manufacturing quality and safety shows no signs of improving nearly three months after the fuselage panel of an airborne 737 MAX jet exploded in January.