S&P Global Ratings said it's no longer considering cutting Boeing Co.'s debt to junk status, citing the planemaker's US$24 billion ($31.42 billion) cash balance and other factors that give it a cushion to absorb future difficulties.
The ratings firm's statement on Monday is the latest sign of progress in Boeing's turnaround after a brutal 2024. The company last week posted first quarter results that exceeded analyst forecasts. In October, the company raised about US$24 billion of equity, and a month after that a machinist union voted to end a crippling strike at the company's factories.
These steps put the company on a clearer path to boosting production of its planes, a key step in Boeing's efforts to return to financial health after a series of design and manufacturing problems grounded its planes and spurred regulators to clamp down on the company.
S&P said it's no longer actively considering cutting Boeing's ratings, which are one step above junk status, at BBB-. The company "appears on track to recovering from the 2024 strike-driven production halt and persistent manufacturing quality problems", S&P said in its statement on Monday. A downgrade would have pushed the planemaker's borrowing costs up.
Boeing remains somewhat insulated from the tariff turbulence rocking the global economy, given the stockpile of parts that the company built up last year when its factories were hobbled by the labor strife.
While China has reportedly told its national airlines to stop taking deliveries from Boeing, the company has said it will find other buyers for the planes that were on order. Still, the potential for trade turbulence to spread beyond China poses "a risk to additional deliveries this year", S&P said.
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Boeing is in the lowest tier of investment-grade with all three major rating firms, including Moody's Ratings and Fitch Ratings. Moody's affirmed that rating in January and removed the company from review for a downgrade, while Fitch never placed Boeing under review after the strike started.
Even with the shift this week, S&P is keeping a negative outlook on Boeing's ratings, which means it still sees a risk of a downgrade in the medium-term.
