Stock Markets

Boeing closes in on $15 billion financing via stock, hybrid bonds

Published

3 months ago

October 17, 2024

By Shankar Ramakrishnan, Echo Wang

(Reuters) -Boeing is closing in on a plan to raise around $15 billion with common shares and a mandatory convertible bond as the jet maker bolsters finances worsened by a crippling strike, four sources familiar with the matter told Reuters.

The company on Tuesday said in regulatory filings that it could raise as much as $25 billion in stock and debt with its investment-grade credit rating at risk. One of the sources cautioned that a $15 billion sale may not be enough for Boeing (NYSE:) to fix its ongoing crises.

The aerospace giant has been dealing with increased regulatory scrutiny, production curbs and a loss of confidence from customers ever since a door panel blew off a 737 MAX plane in midair in early January. Shares are down more than 40% this year.

It has been burning through cash all year, leading to its Tuesday announcements that it will raise money in the capital markets and that it had also secured a $10 billion credit agreement with major lenders: Bank of America, Citibank, Goldman Sachs and JPMorgan.

Boeing declined to comment.

Four investor and banking sources said representatives from those lenders were inquiring about appetite for a combined offering of new shares and a mandatory convertible bond – a hybrid bond that could convert into equity on or before a predetermined date.

Roughly $10 billion in new shares are being contemplated to be sold by the company along with nearly $5 billion in mandatory convertible bonds, the sources said.

One of the four sources said the deal was scheduled to be priced shortly after Boeing’s Oct. 23 third-quarter earnings report. But another investor source said the company was trying to avoid a raise during the month-old strike which analysts estimate is costing tens of millions of dollars per day.

“The timing of any equity raise is still unclear but market consensus is that it should be done after the labor strike is resolved and earnings provide some visibility of its impact on current and future cash flows,” said Michael Barr, senior research analyst at Neuberger Berman.

While Boeing burned less free cash than expected during the third quarter, the planemaker may have no choice but to act before the end of the strike to protect its investment grade rating, two of the sources said.

Boeing shares have rallied since its refunding announcement, suggesting some investors think the trough has been reached. The stock was up 1.1% at $154.01 on Wednesday afternoon.

One investor source said a three-year mandatory convertible bond paying 7% to 8% in annual coupon that could convert into shares at a premium of 20% over the current share price could attract strong demand.

The funding is expected to soften the blow for existing shareholders whose equity ownership could decline when a company issues new shares.

A mandatory convertible option was being pursued because such hybrid bonds can be treated as equity capital by rating agencies, which means issuing them would not add to debt to the same extent as selling bonds. They are friendlier to existing shareholders, as stock conversion is a couple of years away and at a premium.

Raising equity capital is the only funding option for debt-laden Boeing which is intent on protecting its investment-grade ratings.

The top three rating agencies – S&P, Moody’s and Fitch – have warned they will cut Boeing’s ratings to junk if it raised new debt without retiring some $11 billion of debt maturing through Feb. 1, 2026.

Stock Markets

Treasury yields rise, stock falls pressured by stronger-than-expected US. jobs data

Published

18 hours ago

January 11, 2025

By Chibuike Oguh and Amanda Cooper

NEW YORK/LONDON (Reuters) -Global stocks were lower while U.S. Treasury yields rose on Friday after a stronger-than-expected jobs data reinforced expectations that the Federal Reserve will likely keep interest rates elevated for longer than traders were betting on.

Wall Street’s main indexes were trading lower, with technology, financials, real estate and consumer discretionary stocks driving losses. Energy stocks were trading higher.

The Labor Department data on Friday showed that the U.S. economy created 256,000 jobs in December, beating analyst expectations of 160,000, according to a Reuters poll of economists.

“This one of those classic good-news-is-bad-news types of data point,” said James St. Aubin, chief investment officer at Ocean Park Asset Management in Santa Monica, California. “When I think about the economic data that’s good for growth, but it certainly weighs on the yield picture and kind of puts a bit of a bind when it comes to lowering rates. And I think the market is trying to sort that out.”

Markets are now pricing in a single Fed rate cut no sooner than June. Prior to the jobs report, traders were expecting the Fed to cut rates as early as May with a 50% probability of another rate cut before year end, according to CME’s FedWatch tool.

The yield on benchmark U.S. 10-year notes rose 6.6 basis points to 4.747%. It had reached as high as 4.79%, its highest level since November 2023.

The fell 1.69% to 41,916.63, the fell 1.79% to 5,812.30 and the fell 2.13% to 19,064.05.

Shares in small cap companies, which can be more vulnerable to fluctuations in interest rates, came under the most intense pressure, leaving the down 2.5% on the session.

MSCI’s gauge of stocks across the globe fell 1.59% to 832.14. The pan-European finished down 0.84%, dragged down by utilities, consumer non-cyclical, and real estate stocks.

“Bond yields are climbing today because the ability to cut further is going to be diminished after today’s report even though I always advise to look at January numbers with a grain of salt given seasonality issues that work itself out in the next couple of months,” St. Aubin added.

Government bond yields have jumped higher this week amid a broad market selloff that pushed long-dated borrowing costs to multi-year highs.

The turmoil in the fixed income market has hit UK government bonds particularly hard, pushing 30-year gilt yields to their highest since 1998, as investors grow increasingly worried about Britain’s finances.

The , which measures the greenback against a basket of currencies including the yen and the euro,rose 0.45% to 109.69. It reached as high as 109.97, its highest level since November 2022.

The euro was down 0.59% at $1.0237, dropping to its lowest level since November 2022 on the session. The pound fell for a fourth day, dropping by as much as 0.91% to $1.2189, its lowest since November 2023. It last traded down 0.76% at $1.221.

Oil prices rallied nearly 3% to their highest in three months, as traders braced for supply disruptions from the broad U.S. sanctions package targeting Russian oil and gas revenue.[O/R]

futures were up 3.4% to $79.55 a barrel, after its highest since October. U.S. West Texas Intermediate crude futures advanced 3.29% to $76.35, also a three-month high.

Gold prices rose and were on track for the fourth straight day of gains. rose 0.98% to $2,696.33 an ounce. U.S. rose 0.98% to $2,710.00 an ounce.

Stock Markets

RBG Holdings enters exclusive sale talks with founder

Published

18 hours ago

January 11, 2025

LONDON – RBG Holdings plc (AIM: RBGP), a prominent legal services group, has entered into an exclusive negotiation period with its founder, Mr. Ian Rosenblatt, and associated parties for the potential sale of its ‘Rosenblatt’ branded business and certain assets. The talks, initiated on Tuesday, are set to advance a sale to Rosenblatt Law Limited (formerly AWH Acquisition Corp Corporate Limited).

The exclusive period, effective from today until January 24, 2025, aims to facilitate a swift and cooperative discussion regarding the disposal of the business. During this time, both parties have agreed to operate in good faith, abstain from legal actions against one another, and withdraw any ongoing or pending disputes. This includes a winding-up petition issued by Mr. Rosenblatt on January 7 and a general meeting requisition notice dated December 23, 2024.

Mr. Rosenblatt, a significant shareholder in RBG Holdings, has provided evidence of his ownership of Rosenblatt Law Limited since December 19, 2024. Any terms of the potential disposal will be subject to the AIM Rule 13, which pertains to transactions with related parties.

RBG Holdings plans to provide further updates after the discussions have progressed. The company, which includes subsidiaries RBG Legal Services Limited and RBL Law Limited, has been a fixture in the legal services market, with Rosenblatt established in 1989 and Memery Crystal in 1979.

The information about this exclusive negotiation period is based on a press release statement from RBG Holdings plc.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Stock Markets

Radcom stock soars to 52-week high, hits $12.94

Published

18 hours ago

January 11, 2025

Radcom Ltd . (NASDAQ:) shares have surged to a 52-week high, reaching a price level of $12.94, as investors rally behind the company’s strong performance. According to InvestingPro data, the company maintains an impressive “GREAT” financial health score of 3.38, with a robust current ratio of 4.18 indicating strong liquidity. This peak represents a significant milestone for the network software provider, reflecting a robust year-over-year growth of 17.8% in revenue. Over the past year, Radcom’s stock has witnessed an impressive 65.37% increase, underscoring the company’s expanding market presence and investor confidence in its strategic direction. The 52-week high serves as a testament to Radcom’s potential in the competitive tech landscape, as the company continues to innovate and capture market share. InvestingPro subscribers have access to 12 additional key insights about RDCM, including detailed valuation metrics and growth forecasts, essential for making informed investment decisions.

In other recent news, RADCOM Ltd. reported a record revenue of $15.8 million in its third quarter of 2024, a notable 20% increase from the same period last year. The company also announced the appointment of Benny Eppstein as the new CEO, effective December 1st. This growth in revenue is attributed to the strong demand for RADCOM’s cloud-based assurance solutions, particularly in North America and Europe. The company has also raised its full-year 2024 revenue guidance to between $59 million and $62 million, along with a significant increase in profitability, reporting a non-GAAP net income of $3.7 million.

In addition to these financial highlights, RADCOM secured a multi-year contract with a North American operator and anticipates growth in Voice over New Radio (VoNR) technologies by 2025. The company is optimistic about maintaining growth and profitability, with a significant portion of revenue coming from multi-year contracts. RADCOM’s strategy for growth includes investments in AI and analytics to strengthen its market position in cloud assurance. The company is also expecting to capitalize on 5G advancements and VoNR deployments anticipated in 2025.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.