Boeing Bond Analysis
Boeing
Bond Analysis
Presented to
Dr. -----
Prepared by
Filipe Ferro
October 9, 2012
Table of Contents
Boeing Company 3
Bond Issue 3
Unsystematic Risk 4
Principal Repayment 4
Debt to Invested Capital 4
Debt to Equity 4
Current & Quick Ratios 5
Interest Repayment 5
Times Interest Earned 5
Credit Position 6
Competitor Analysis 6
General Dynamics 6
Northrop Grumman 7
Systematic Risk 7
Market Responsiveness 7
Duration 8
Modified Duration 9
Accuracy of Rating 9
Interest Rate Expectations 9
Summary 10
Appendix 11
Descriptive Statistics 11
Regression Analysis 11
Duration & Modified Duration 12
References 13
Boeing Company Boeing is a manufacturer of aircrafts and national defense equipment making it a member of the Aerospace & Defense industry. It was founded in Seattle, Washington on July 15, 1916. It is headquartered in Chicago, Illinois, USA. Commercial aircraft include the 737, 747, 777, and very recently, the 787. Military products consist of high-dexterity and stealthy aircraft such as a the A-10 Thunderbolt II and highly-efficient and powerful satellites such as the Boeing 601.1 Its biggest competitors are Northrop Grumman, General Dynamics, and Airbus. According to Morningstar, Boeing employed 171,700 people and revenue reached $69 billion in 2012.2 Bond Issue The bond I have chosen to analyze is a debenture with a maturity date of August 15, 2021. Morningstar shows this bond issue consists of 400 million $1,000 par value bonds with 398 of them outstanding. The bond is a semi-annual fixed coupon bond with an annual rate of 8.75%. The accrual start date was August 15, 1991. The original life of the bond was 30 years and the remaining life as of October 2012 is a little over 8 years and 10 months. This bond issue is non-callable, non-putable, non-convertible, and it is not subject to Rule 144A. These bonds are currently selling at 135.20% of par value as of September 29, 2012, making their price
Bond Analysis
Presented to
Dr. -----
Prepared by
Filipe Ferro
October 9, 2012
Table of Contents
Boeing Company 3
Bond Issue 3
Unsystematic Risk 4
Principal Repayment 4
Debt to Invested Capital 4
Debt to Equity 4
Current & Quick Ratios 5
Interest Repayment 5
Times Interest Earned 5
Credit Position 6
Competitor Analysis 6
General Dynamics 6
Northrop Grumman 7
Systematic Risk 7
Market Responsiveness 7
Duration 8
Modified Duration 9
Accuracy of Rating 9
Interest Rate Expectations 9
Summary 10
Appendix 11
Descriptive Statistics 11
Regression Analysis 11
Duration & Modified Duration 12
References 13
Boeing Company Boeing is a manufacturer of aircrafts and national defense equipment making it a member of the Aerospace & Defense industry. It was founded in Seattle, Washington on July 15, 1916. It is headquartered in Chicago, Illinois, USA. Commercial aircraft include the 737, 747, 777, and very recently, the 787. Military products consist of high-dexterity and stealthy aircraft such as a the A-10 Thunderbolt II and highly-efficient and powerful satellites such as the Boeing 601.1 Its biggest competitors are Northrop Grumman, General Dynamics, and Airbus. According to Morningstar, Boeing employed 171,700 people and revenue reached $69 billion in 2012.2 Bond Issue The bond I have chosen to analyze is a debenture with a maturity date of August 15, 2021. Morningstar shows this bond issue consists of 400 million $1,000 par value bonds with 398 of them outstanding. The bond is a semi-annual fixed coupon bond with an annual rate of 8.75%. The accrual start date was August 15, 1991. The original life of the bond was 30 years and the remaining life as of October 2012 is a little over 8 years and 10 months. This bond issue is non-callable, non-putable, non-convertible, and it is not subject to Rule 144A. These bonds are currently selling at 135.20% of par value as of September 29, 2012, making their price
References: 1Boeing. (1995). A-10 Thunderbolt II. Retrieved 2012 йил 05-October from http://www.boeing.com/defense-space/support/maintenance/a10/index.html 2Morningstar 3Standard&Poor 's. (2012, October 02). Boeing. Retrieved October 02, 2012, from Standard&Poor 's NetAdvantage: http://www.netadvantage.standardandpoors.com 4Tortoriello, R 5Mergent Online. (2011, December 31). Boeing Co. (The) (NYS:BA): Long Term Debt. Retrieved October 1, 2012, from Mergent Online : www.new.mergentonline.com.proxymu.wrlc.org/companydetail.php?pagetype=longtermdebt&compnumber=1048 6Standard&Poor 's 7Yahoo! (2012, October 03). General Dynamics (GD). Retrieved October 03, 2012, from Yahoo!Finance: http://www.finance.yahoo.com/q?s=GD 8Yahoo! (2012, October 03) 9Wall Street Journal. (2012, October 01). Tracking Bond Benchmarks. Retrieved October 02, 2012, from Wall Street Journal: http://online.wsj.com/mdc/public/page/2_3022-bondbnchmrk.html 10Federal Reserve 11Douglas, D. (2012, October 02). Wary Americans saving more, even as government encourages risk. Washington Post . 12Mishkin, F. S. (2012). The Economics of Money, Banking, and Financial Markets Tenth Edition. Upper Saddle River, New Jersey, USA: Pearson.