Fitch Ratings downgraded (28-Jan-2011) the issuer default ratings (IDRs) for the Boeing Company (BA) and Boeing Capital Corporation (BCC) from A+ to A. The continued cash flow impact from delays in the B787 and B747-8 programmes is the key driver of the downgrades. Fitch expects inventory build and other costs from these two programmes have weighed on the company's cash performance for three years, and this will continue in 2011, with B787-related assets on BA's balance sheet likely to increase another USD6 billion to approximately USD19 billion. Fitch's ratings actions for both BA and BCC are summarised as follows:
- Long-term IDR downgraded to A from A+;
- Senior unsecured debt downgraded to A from A+;
- Bank facilities downgraded from A to A+;
- Short-term IDR affirmed at F1;
- Commercial paper programs affirmed at F1.
The rating outlook is stable, reflecting "favourable developments and conditions in other parts of BA's portfolio which have partly offset the impact of the developmental aircraft delays", particularly the recovery in the large commercial aircraft market. The ratings cover approximately USD12.4 billion of debt (USD9 billion at BA, including approximately USD360 million of non-recourse debt, and USD3.4 billion at BCC). [more]