Boeing's two 737 Max crashes have caused a big blow to the airliner's business that it is now forced to borrow money to the tune of $10 billion just to tide it over.
Sources said Boeing has so far secured some $6 billion from lenders, and is currently in talks with other banks to get more help.
The $10 billion it needs for some sort of quick bailout might not be enough as lenders may lay down more demands, sources bared.
According to analysts, liquidity is not the primary issue, as the new debt indicates the airliner is shoring up its cash reserves following the brand-maiming effects of the plane tragedies: in Indonesia, October 2018, and in Ethiopia, March of last year, which claimed the lives of 346 passengers.
The money Boeing now needs very badly is more than what some market observers anticipated. For instance, Jefferies expected Boeing would disclose $5 billion in debt this quarter.
But the aircraft's return has been marred by a looming setback that threatens to jack up the company's expenditures, including a new operating system glitch revealed by Boeing last week.
This month, the company halted production of the beleaguered jets as the grounding enters its 11th month, a planned stoppage in plant activities that have imperiled thousands of employees.
However, the plane manufacturer disclosed earlier this month that it did not plan to terminate 737 Max staff and stated they would be reassigned to other tasks.
Boeing also revised its position and will now recommend pilots to take a simulator-training course -- a costly and time-consuming process, and one that needs to be done -- before the aircraft can be allowed to operate again.
The airliner registered negative orders for planes in the last quarter of 2019, its most discouraging sales in the last 10 years, and relinquished its title of being the world's largest plane-maker to its European competitor, Airbus.
Boeing has since tried to troubleshoot a software glitch for its fleet after a flight-control system was linked in the fatal crashes and state regulators have yet to finalize other checks to validate the jets are air-worthy.
As this developed, Moody's Investors Service pointed out that it was reassessing Boeing's "investment grade" credit status following the Max jets dilemma.
Meanwhile, the loan Boeing is working on will be a 2-year, delayed-draw bond, meaning the company can use it later, an option that may not immediately affect its credit status as another type of equity would, sources divulged.
