Bombardier redeems C$150m in debentures

Bombardier’s next debt maturity is not until November 2030, giving the company a clear runway to focus on growth.

Bombardier has completed the redemption of all outstanding C$150m of its 7.35% debentures due 2026, bringing the total debt reduced this year alone to more than $1.1bn.

“Since 2020, we have maintained a disciplined and deliberate focus on debt reduction, lowering our long-term debt by approximately $6.1bn. This has reduced our interest payments by more than $460m on an annualised basis,” said Bart Demosky, chief financial officer of Bombardier. “With no maturities until November 2030, we are well positioned to fully focus on and accelerate our next phase of growth.”

The redemption is the latest milestone in a multi-year financial turnaround that began in earnest around 2020, when Bombardier was carrying a heavy debt load following years of costly commercial aviation ventures.

The company subsequently exited commercial aerospace entirely – selling its regional jet programme to Mitsubishi and divesting other assets – to refocus exclusively on business jets. What followed was a sustained deleveraging campaign that has now reduced long-term debt by $6.1bn over six years.

Along the way, the company has received multiple credit rating upgrades, most recently reaching a Ba3 rating from Moody’s and BB- from S&P Global Ratings, both still below investment grade, but significantly improved from where the company stood at the start of the decade.

Bombardier’s next debt maturity is not until November 2030, giving the company a clear runway to focus on growth. The company is targeting an adjusted net debt-to-adjusted EBITDA ratio of approximately 1.5x over time, down from levels that once threatened its financial stability.