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AIR - Airbus SE News Story

€99.57 3.6  3.7%

Last Trade - 14/05/21

Sector
Industrials
Size
Large Cap
Market Cap £67.37bn
Enterprise Value £69.66bn
Revenue £42.84bn
Position in Universe 14th / 850

UPDATE 1-Boeing says financing available to back jet deliveries

Thu 15th April, 2021 12:19am
(Recasts with financing optimism, adds quotes, background)
    April 14 (Reuters) - Boeing Co  BA.N  voiced optimism on
Wednesday over financing for jet buyers to take deliveries as
the industry looks to a recovery in air travel, while raising an
amber flag over airline access to commercial bank loans.
    Industrywide needs for funding to support deliveries fell
about 40% to $59 billion in 2020 as the pandemic stifled
production already weakened by the grounding of the Boeing 737
MAX in 2019.
    "Despite the unprecedented impacts of COVID-19 on the global
aerospace industry, there generally continues to be liquidity in
the market for our customers," said Tim Myers, president of
Boeing Capital, the planemaker's financing arm.    
    "We expect it to further improve as travel begins to
rebound."
    Aviation has become a fast-growing alternative asset class
over the past decade, as investors flocked toward
dollar-denominated investments that offer relatively high
returns, especially when set against a backdrop of low interest
rates.
    As the pandemic swept across the industry just over a year
ago, credit spreads widened, capital markets closed to aviation
and banks retreated, Boeing said in an aviation finance report.
    But "capital markets came back, and new sources of funding
from institutional investors and funds came to market," it
added.
    One lingering concern surrounds the availability of
commercial bank funding, which typically makes up about a third
of the financing needed to support jet deliveries.
    Commercial lending has recovered ground since 2020 but
remains on Boeing's watchlist along with certain tax-related
instruments. But for now, capital from investment funds is
filling the gap.
    "We expect that capital will continue to be routed into the
sector by established players and as new entrants seek
opportunities during the industry's recovery," Myers said.

 (Reporting by Shreyasee Raj and Ankit Ajmera in Bengaluru;
Editing by Devika Syamnath, Tim Hepher and Richard Chang)
 ((Shreyasee.Raj@thomsonreuters.com;))
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