- Investors of Bombardier (TSX:BBD.B) stock are being notified that the company is redeeming its senior notes
- The Canadian business jet manufacturer issued a notice of partial redemption for US$338 million principal amount of its outstanding 7.12 per cent senior notes due in 2026, which will be paid using cash from its balance sheet
- Senior notes are a type of bond that take precedence over other debts if a company goes bankrupt. Although they carry less risk compared with stocks, they typically offer lower interest rates
- Bombardier stock last traded at C$90.53 per share
Investors of Bombardier (TSX:BBD.B) stock are being notified that the company is redeeming its senior notes.
The Canadian business jet manufacturer issued a notice of partial redemption for US$338 million principal amount of its outstanding 7.12 per cent senior notes due in 2026, which will be paid using cash from its balance sheet.
The aerospace company also levied a conditional notice of partial redemption for US$450 million aggregate principal amount of its outstanding 7.87 per cent senior notes due in 2027.
Senior notes are a type of bond that take precedence over other debts if a company goes bankrupt. Although they carry less risk compared with stocks, they typically offer lower interest rates.
Companies frequently use senior notes to secure loans at lower interest rates than other debt forms. When these notes are converted into company shares, they help decrease the company’s debt liabilities.
Each redemption of the notes depends on Bombardier completing a new offering of debt securities of no less than US$750 million before the June 20, 2024.
Earlier this week, Bombardier also successfully priced its offering of US$750 million aggregate principal amount of new senior notes due June 1, 2032. The company intends to use the proceeds of these new notes, along with cash on hand, to repay its debuts including the US$338 million redemption.
Montreal-based Bombardier designs, manufactures and services business jets, including the Global and Challenger aircraft families. The company has a worldwide fleet of more than 5,000 aircraft in service across multinational corporations, charter and fractional ownership providers, governments and private individuals.
Bombardier Inc. stock (TSX:BBD.B) last traded at C$90.53 per share. Though nearly 60 per cent higher in the past month, the stock has given back nearly as much year-over-year, but has risen more than 4,000 per cent over the past five years.
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