Bombardier Inc. T.BBD.A

On the Vista Jet exposure

[Tempo1]

Copy of a dec 12 Desjardins report:

Chart of the week:

VistaJet, a levered BBD customer and pushback on the name

—we believe investor concerns are overstated. Since Vista’s bond issuance, BBD shares have traded relatively in line with Vista’s bond. We believe concerns over Vista’s leverage and its fleet’s overweight exposure to BBD are to blame. Although Vista has a long history of operating at highly levered levels, we believe investors remain anxious about what might occur to BBD’s pricing power and to customer demand if Vista were forced to sell or flood the pre-owned market with BBD aircraft. In our view, these concerns are overstated for several reasons:
(1) BBD has now delivered all jets ordered by Vista, with none left in the backlog;
(2) Moody’s does not expect Vista to place new orders in the next two years;
(3) today’s preowned inventory remains very tight;
(4) Vista’s leverage is much improved;
(5) Vista has solid financing in place, with Canada’s EDC financing up to 85% of the net purchase price of BBD jets; and
(6) BBD’s newly launched CPO program makes the risk of aircraft flooding the market much more manageable.

[PabloLafortune]

In other words, Bombardier is only exposed to Vistajet aftermarket revenues and profits!!!

[johnney]

This is another less for the company, after market and profits!!

[johnney]

It's always been exposed to something, for years now! Always something negative that come out for them, every time, every time their head is starting to be above the water! !

[stock4life48]

True, but someone will own the jets, either Vista or someone else and they need to be serviced so we have nothing to lose IMO Tempo, good article, thanks for posting