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S&P says high-yield market could absorb Boeing’s debt if credit is cut to junk levels

Posted on by L. Dreeye
S&P says high-yield market could absorb Boeing’s debt if credit is cut to junk levels

S&P Global Ratings said Boeing’s downgrade to junk would send its speculative-grade U.S. bond composite up 7.15% in one day. Currently, the total debt is about $742 billion.

This would be the biggest increase in the index since May 2005, when Ford Motor Co.’s ratings. and General Motors Co. were downgraded to junk status ahead of US government bailouts.

At the time, GM and Ford added a combined 16%, more than Boeing did today.

“The question is whether the speculative-grade market can take it,” Nick Cramer, managing director and head of ratings research at S&P Global Ratings, wrote in a note Tuesday. “We think the answer is probably no.”