RE:RE:First glance analysisHey Temp.
We're in agreement of the B rating next year. Bombardier will be able to produce
earnings more efeciently by keeping costs low
. Because they're a pure play now as opposed to it's competitors, EM and BD will keep tight reigns on BA, especially in the next 3 to 4 years. One slip up and there goes the whole ship. Their debt is still high, and will be high ($6.3B approx.) for 2024. Until they reach EBITDA of $1.5B by 2025, and Revs of $7.5, for 2025 (as they're predicting), we won't get too much relief on interest rates.
Perfect example is Boeing of 2 years ago when they had problems with the Max. They had an A credit rating, yet they were only able to get $10B @ 4.5%.
If the Bomber gets to 6%/6.5% rates for their remaining LTD in 2023, after payment of those upcoming LTD's, I'll be happy as a lark. The Junk Bond holders call the shots when you are in junk Bond territory, you trust me on that. By 2025, now that's a different story. $500M of +FCF yearly, will go a long way to a BBB- Rating. If they are churning $500M a year? Then they deserve the investment grade title. JMHO of course, anything can happen from now till then. Cheers
lb1temporary wrote: Just a small note: The BBB- rating is an ''investment grade'' level with at least a maximum of debt/ EBITDA ratio under 1:1.
We could be happy with a B level next year, two notches over the current CCC+ rating. That implies a 3,5% or 4% interest rate level.