Investment grade or no?Some precision about my thinking (all opinions are good on that topic, so I don't want to contradict others) :
Bombardier has a B+ credit rating, 4 notches from the BBB-, the lower investment grade one. That takes time, rating agencies move one notch at a time , 9 to 12 months between each upgrades. My best example, is AC, it takes 7 years to move from CCC+ to BB from 2012 to 2018. Look at BBD, from CCC+ to B+ (3 notches) we had 3 years (2021 to 2024). Rating agencies never swing their opinions, they have only a long term view. So, the sooner for a BBB rating is 2027 (with a debt reimbursment accelerating scenario). Don't forget that the debt reimbursment is done at a 400-500 m$ per year pace.
The other element is ; is it a goal ? Debt level has to be balanced; the absolute lower debt level is not an objective. Optimal debt level is the goal. Bombardier is not a pipeline, it has a 18-20% margin operation in a cyclical market (bizz jets). An investment grade rating VS a BB one is expensive; for a meagre gain of 1% in interest rate ( an economy of maybe 20-30M$ ), it will have to invest 1B$-1,5B$ in the debt. Is that the better use of money with an operation with a 18%-20% margin? Choosing an economy of 20-30M$ instead of investing 1B$-1,5B$ in an operation at 18% margin (180M$-270M$ profit).
Doing so, the return on equity (profits made with your capital invested) will be lower by the mix of a 5%-6% profit with the 18%-20% operational one (for each dollar invested). A underperformance return.
As managers, the board has to choose what they will do with their money. If they can't find an additional investment at a reasonable margin (more than 13% for example), they can return the money to shareholders. Sometime, companies does it by a special dividend (or others ways); the shareholders could find better investment than the reimbursement of a 5,5% rate debt. We all did it in the past 4 years.
As a shareholder, the lower return on equity will slow the growth of th SP, the company unable to generate profits at the same pace than before.