(Montreal) The firm S
Bombardier’s rating thus goes from “B-” to “B”, with a stable outlook. This means that the firm still views the company’s liabilities as “highly speculative”, but the change reflects an improved outlook.
“Solid execution with an order book of US$14.8 billion and debt repayment means that deleveraging is happening at a much faster pace than anticipated”, analyzes S
The rating agency believes that Bombardier can cope with a “moderate slowdown”. It predicts that the company will still be able to reduce its debt burden, from 6 times earnings before interest and amortization (EBITDA) to “less than” 5 times in 2024.
His hypothesis estimates that a 10% reduction in new orders would result in a decrease of between $120 million and $150 million in cash for the company.
Bombardier’s chief financial officer, Bart Demosky, sees S’s decision
Recall that Bombardier had raised the targets of its 2025 strategic plan in March, in particular with the objective of accelerating the repayment of its debt. Management said the move reflected confidence in a time of economic uncertainty.
The pandemic has given a boost to the business jet industry, which many corporations and wealthy travelers have favored over commercial aviation.
President and CEO Eric Martel said last week that demand remains resilient in the business aviation industry. The end of March was marked by a slowdown in orders in the United States in the wake of the uncertainty that shook the American banking sector. This period of uncertainty would have been brief, he said. “ We felt hesitation on the part of customers for two or three weeks. […] Since then, activities have returned to normal. »
In a report published at the end of April, the firm WingX affirms, for its part, that the favorable gap compared to the activity before the pandemic is narrowing.
Bombardier shares lost $1.45, or 2.42%, to $58.59 on the Toronto Stock Exchange in the morning.
