Bombardier Inc. T.BBD.A

The bond return asked for Bombardier's bonds is decreasing

[lb1temporary]

This morning the return asked for Bombardier dec 2026 bonds is 6,69%
At the same time, the return asked for Ford Canada (a BB+ rated company backed by FORD US) for their sept 2026 bonds is 6,17%. 

Ford is only one notch (BB+) under the Investment grade rating  (BBB-) and Bombardier is at B, 4 notches under FORD. 

Good.

[Truthifest]

I didn't realize Bombardier was upgraded by S&P from B- to B.  Was kinda inevitable, given the company's improving credit quality and Mooody's upgrade earlier this month. I wonder if the company can refi some of this debt.  The issue you mentioned has a 7.35% coupon, for example, and the 2027's: 7.875%.  But the junk bond issuance mkt is all but dead recently

[lb1temporary]

No, S&P didn't rerate Bombardier yet. I use the most common way for ratings, BB instead of Ba used by Moody's. It has the same meaning and more generally used. The price for the 2026 bonds is over 102$. All bonds with an interest rate above the return has a price over 100$. That's put the refinancing more expensive.

[Truthifest]

I don't know the call provisions.  Unfortunately, sounds like they can't call them at par, not yet anyway.  

[lb1temporary]

According to the TD web broker there is no dates set for a call provision, so, it's dec 2026 or at the market price (by the way of an offer).

[Truthifest]

Thx.  Would be nice to have that ability now, but I suppose would have cost them a bit to have had that option included in the deal.  When I was managing a fixed income portfolio of high risk credits, we would typically do a "yield to worst" calculation when doing our due dilly, because most of the deals had call provisions.  CFOs wanted the extra flexibility that calling