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Boeing will take the Aid

The $2 trillion package has a special seventeen billion dollar provision designed specifically for Boeing. The bill almost names Boeing as the recipient stating

“Not more than $17,000,000,000 shall be available to make loans and loan guarantees for 18 businesses critical to maintaining national security.”

However, Boeing has made clear that they refuse to make use of this line of credit. It is almost certain that a precondition of these loans it that Boeing’s share will be used as collateral. While Boeing has $12 billion on hand, that will not be enough to make up for the prolonged troubles of their commercial business. With decreased demand and regulatory troubles, Boeing will be forced to drawdown these credit lines and dilute their common share. This dilution, while providing liquidity to the company, will almost certainly drive down their share price. With all of these compounding factors, it will be a long time before Boeing’s stock flies again.

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