Moody’s upgrades Bombardier to Ba3
Rating agency Moody’s announced it has upgraded Bombardier’s corporate family rating to Ba3 from B1 with outlook maintained at ‘positive’.
“The upgrade reflects Bombardier’s continued progress reducing its financial leverage, increased earnings, improved margins and strong free cash flow position,” said Moody’s Ratings analyst, Will Gu.
Commenting on the rationale behind this upgrade, Gu said that the Canadian aerospace manufacturer has seen improvements in its margins and earnings.
“The company has generated positive free cash flow since 2021 and we anticipate over $500m of free cash flow for 2025,” the ratings note highlighted. Moody’s also highlighted that the company continues to reduce debt, with $350m confirmed to be repaid by year end 2025 with the expectation that additional repayment continues to occur through 2026.
In a separate statement, Bombardier also announced that it had redeemed all remaining outstanding $99.4m aggregate principal amount of its 7.875% Senior Notes due 2027. This redemption was funded using cash from Bombardier’s balance sheet.
Bart Demosky, executive vice president and CFO of Bombardier said the: “team is proud to share that Moody’s has upgraded the company’s credit rating from B1 to Ba3, with a positive outlook.”
With this recent upgrade, Bombardier’s credit ratings are back in the Ba/BB category with both Moody’s and S&P for the first time in over a decade.
Earlier in June, S&P also upgraded Bombardier’s rating to BB- from B+ citing the company’s strengthening competitive position in recent years as it ramped up production and deliveries of its aircraft while growing its backlog.
The ratings agency particularly highlighted Bombardier’s growth in business jet deliveries which are on track to hit 150 this year despite supply chain challenges across the industry.
