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Boeing seeks up to $35bn to bolster its balance sheet

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Boeing seeks up to bn to bolster its balance sheet

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Boeing has announced plans to raise up to $25bn in new capital and agreed a $10bn credit facility, as the US plane maker seeks to shore up its balance sheet in the face of a crippling strike by its largest labour union.

In a filing, Boeing told investors it intended to raise up to $25bn in debt or equity, adding that this would provide “flexibility for the company to seek a variety of capital options as needed . . . over a three-year period”.

It has also struck a separate $10bn “supplemental credit agreement” with a consortium of lenders.

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Boeing provided no details on precisely how much it intended to raise and when. It said it had not drawn on the new credit facility.

“These are two prudent steps to support the company’s access to liquidity,” the company said, adding that the credit agreement provided additional short-term access to liquidity as it navigated through a “challenging environment”.

Rating agency S&P Global Ratings last week warned of a possible downgrade of Boeing’s bonds to junk status, and analysts had said they expected the company to look to raise at least $10bn in new equity to maintain its investment-grade credit rating.

“They have bought themselves some time,” Ben Tsocanos, aerospace director at S&P, said on Tuesday. He added, however: “Ultimately the company has to resolve the strike and really be on a path to building planes again in order to maintain the rating.”

One bondholder said: “I think this is a smart strategy by management. They’re basically looking for a bridge facility just to give the market confidence that there aren’t any near-term concerns as they go through negotiations with the union.”

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Rating agency Fitch said Boeing’s actions would “increase financial flexibility and moderate near-term liquidity concerns amidst an extended strike and continued operational challenges”.

Boeing shares were up just under 2 per cent at $151.92 in afternoon trading in New York after initially falling when markets opened.

Some analysts, however, were not convinced. Nick Cunningham at Agency Partners, said the vagueness and breadth of the filing and the need for the temporary financing implied “that the banks are struggling to sell this issue to potential investors or lenders”.

A second bondholder said they hoped that any equity issuance raised “would be closer to $15bn and not $10bn”, to limit the risk of Boeing having to tap shareholders again if the first issuance proved insufficient.

The fundraising plan comes as Boeing struggles to deal with the impact of a strike by its largest union that has halted production at factories in Washington state, threatening a possible credit downgrade.

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The industrial action by 33,000 members of the International Association of Machinists and Aerospace Workers, which began on September 13, has stopped manufacturing lines of most of its planes, including its best-selling 737 Max.

“From a position of negotiating strength, I’m not sure you necessarily need to [issue] the equity before the strike is settled,” the second bondholder added. “You don’t want to necessarily say to the union ‘I have great liquidity, let’s keep on going forever on this one’.”

A third bondholder noted that they did not know how long the strike would continue, saying: “The problem with these supply chains is once you turn them off, it’s pretty hard to turn them back on, so we don’t know how much cash they need, and nor do they.”

The group has been grappling with problems since a door panel blew off one of its 737 Max aircraft in mid-flight at the start of January. Regulators demanded that the company slow production of the best-selling jet as part of a wider effort to improve quality and safety.

Boeing on Friday announced it would cut 17,000 jobs from its operations to stem losses, as it booked about $5bn of pre-tax charges.

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It also announced another delay to its 777X jet to 2026. The company said it ended September with $10.5bn in cash and marketable securities — close to the minimum it has said it needs to operate — after burning through $1.3bn in cash during the third quarter.

Boeing had close to $58bn in consolidated debt at the end of the second quarter.

It will report full results for the third quarter on October 23.

Kelly Ortberg, who became Boeing’s chief executive in August, told employees on Friday that “restoring our company requires tough decisions” and structural changes, to ensure that “we can stay competitive and deliver for our customers over the long term”.

Additional reporting by Jennifer Hughes

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Trump claims US stockpiles mean wars can be fought ‘forever’; Kristi Noem testifies before Congress – US politics live

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Trump claims US stockpiles mean wars can be fought ‘forever’; Kristi Noem testifies before Congress – US politics live

Trump says US stockpiles mean “wars can be fought ‘forever’”

In a late night post on Truth Social, Donald Trump said that the US munitions stockpiles “at the medium and upper medium grade, never been higher or better”.

He added that the US has a “virtually unlimited supply of these weapons”, meaning that “wars can be fought ‘forever’”.

This comes after Trump said that the US-Israel war on Iran could go beyond the four-five weeks that the administration initially predicted. The president also did not rule out the possibility of US boots on the ground in Iran during an interview with the New York Post on Monday.

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“I rebuilt the military in my first term, and continue to do so. The United States is stocked, and ready to WIN, BIG!!!,” he wrote.

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Key events

During his opening remarks, Senate judicicary committee chairman, Chuck Grassley, blamed Democrats for the ongoing shutdown Department of Homeland Security (DHS) but highlighted four agencies: the Secret Service, Federal Emergency Management Agency (FEMA), the Transportation Security Administration (TSA), and the Coast Guard.

Democrats are demanding tighter guardrails for federal immigration enforcement, but a sweeping tax bill signed into law last year conferred $75bn for Immigration and Customs Enforcement (ICE), which means the agency is still functional amid the wider department shuttering.

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Supreme Court blocks redrawing of New York congressional map, dealing a win for GOP

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Supreme Court blocks redrawing of New York congressional map, dealing a win for GOP

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Win McNamee/Getty Images

The Supreme Court on Monday intervened in New York’s redistricting process, blocking a lower court decision that would likely have flipped a Republican congressional district into a Democratic district.    
  
At issue is the midterm redrawing of New York’s 11th congressional district, including Staten Island and a small part of Brooklyn. The district is currently held by a Republican, but on Jan. 21, a state Supreme Court judge ruled that the current district dilutes the power of Black and Latino voters in violation of the state constitution.  
  
GOP Rep. Nicole Malliotakis, who represents the district, and the Republican co-chair of the state Board of Elections promptly appealed to the U.S. Supreme Court, asking the justices to block the redrawing as an unconstitutional “racial gerrymander.” New York’s congressional election cycle was set to officially begin Feb. 24, the opening day for candidates to seek placement on the ballot.  
  
As in this year’s prior mid-decade redistricting fights — in Texas and California — the Trump administration backed the Republicans.   
 
Voters and the State of New York contended it’s too soon for the Supreme Court to wade into this dispute. New York’s highest state court has not issued a final judgment, so the voters asserted that if the Supreme Court grants relief now “future stay applicants will see little purpose in waiting for state court rulings before coming to this Court” and “be rewarded for such gamesmanship.” The state argues this is an issue for “New York courts, not federal courts” to resolve, and there is sufficient time for the dispute to be resolved on the merits. 
  
The court majority explained the decision to intervene in 101 words, which the three dissenting liberal justices  summarized as “Rules for thee, but not for me.” 
 
The unsigned majority order does not explain the Court’s rationale. It says only how long the stay will last, until the case moves through the New York State appeals courts. If, however, the losing party petitions and the court agrees to hear the challenge, the stay extends until the final opinion is announced. 
 
Dissenting from the decision were Justices Sonia Sotomayor, Elena Kagan, and Ketanji Brown Jackson. Writing for the three, Sotomayor  said that  if nonfinal decisions of a state trial court can be brought to highest court, “then every decision from any court is now fair game.” More immediately, she noted, “By granting these applications, the Court thrusts itself into the middle of every election-law dispute around the country, even as many States redraw their congressional maps ahead of the 2026 election.” 

Monday’s Supreme Court action deviates from the court’s hands-off pattern in these mid-term redistricting fights this year. In two previous cases — from Texas and California — the court refused to intervene, allowing newly drawn maps to stay in effect.  
  
Requests for Supreme Court intervention on redistricting issues has been a recurring theme this term, a trend that is likely to grow.  Earlier last month  the high court allowed California to use a voter-approved, Democratic-friendly map.  California’s redistricting came in response to a GOP-friendly redistricting plan in Texas that the Supreme Court also permitted to move forward. These redistricting efforts are expected to offset one another.     
   
But the high court itself has yet to rule on a challenge to Louisiana’s voting map, which was drawn by the state legislature after the decennial census in order to create a second majority-Black district.  Since the drawing of that second majority-black district, the state has backed away from that map, hoping to return to a plan that provides for only one majority-minority district.    
     
The Supreme Court’s consideration of the Louisiana case has stretched across two terms. The justices failed to resolve the case last term and chose to order a second round of arguments this term adding a new question: Does the state’s intentional creation of a second majority-minority district violate the constitution’s Fourteenth and Fifteenth Amendments’ guarantee of the right to vote and the authority of Congress to enforce that mandate?    
Following the addition of the new question, the state of Louisiana flipped positions to oppose the map it had just drawn and defended in court. Whether the Supreme Court follows suit remains to be seen. But the tone of the October argument suggested that the court’s conservative supermajority is likely to continue undercutting the 1965 Voting Rights Act.   

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Map: Earthquake Shakes Central California

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Map: Earthquake Shakes Central California

Note: Map shows the area with a shake intensity of 3 or greater, which U.S.G.S. defines as “weak,” though the earthquake may be felt outside the areas shown.  All times on the map are Pacific time. The New York Times

A minor earthquake with a preliminary magnitude of 3.5 struck in Central California on Monday, according to the United States Geological Survey.

The temblor happened at 7:17 a.m. Pacific time about 6 miles northwest of Pinnacles, Calif., data from the agency shows.

As seismologists review available data, they may revise the earthquake’s reported magnitude. Additional information collected about the earthquake may also prompt U.S.G.S. scientists to update the shake-severity map.

Source: United States Geological Survey | Notes: Shaking categories are based on the Modified Mercalli Intensity scale. When aftershock data is available, the corresponding maps and charts include earthquakes within 100 miles and seven days of the initial quake. All times above are Pacific time. Shake data is as of Monday, March 2 at 10:20 a.m. Eastern. Aftershocks data is as of Monday, March 2 at 11:18 a.m. Eastern.

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