Bombardier Postpones $1 Billion Debt Sale After Downgrade
Bombardier Inc. (BBD/B), the commercial- aircraft maker whose credit rating was cut yesterday by Standard & Poor’s on lower-than-expected cash generation, is delaying a $1 billion bond offering.
The bond sale was postponed due to market conditions, according to Isabelle Rondeau, a spokeswoman at the Montreal- based company. Bombardier had planned to sell eight- and 10-year senior notes for general corporate purposes, according to a person familiar with the offering who asked not to be identified, citing lack of authorization to speak about the transaction.
“The market conditions were not satisfactory,” Rondeau said in a telephone interview. She declined to comment on when the company planned to issue the debt.
Bombardier’s credit rating was lowered one step by S&P to BB, two levels below investment grade, from BB+. The company’s leading market positions, cost-efficiency and widening array of products “are partially offset, in our opinion, by the financing pressure Bombardier’s customers face in the aerospace and transportation divisions,” increasing leverage and risks tied to the delayed new CSeries jetliner, S&P said in a report.
The company’s $500 million of 5.75 percent notes due 2022 dropped 2.1 cents on the dollar to 98.5 cents, yielding 5.96 percent at 10:50 a.m. today in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Bombardier’s widely-traded Class B stock fell 6.3 percent to C$2.99 in Toronto trading. Earlier the stock dropped as low as C$2.97, its lowest intraday level since April 2009.
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