- Investors of Bombardier (TSX:BBD.B) have been notified that the company has redeemed its senior notes
- The Canadian business jet manufacturer issued a notice of redemption for US$100 million principal amount of its outstanding 7.875 per cent senior notes due 2027, which will be paid using cash from its balance sheet
- Senior notes are a common way for companies to borrow money with lower interest than other kinds of debt. When notes are redeemed for company shares, they reduce the businesses’ debt obligations
- Bombardier stock last traded at C$56.95 per share
Investors of Bombardier (TSX:BBD.B) stock have been notified that the company has redeemed its senior notes.
The Canadian business jet manufacturer issued a notice of redemption for US$100 million principal amount of its outstanding 7.875 per cent senior notes due in 2027, which will be paid using cash from its balance sheet.
Senior notes are a type of bond that have priority over other debts in case a company declares bankruptcy. While they have a lower degree of risk compared with stocks, senior notes often also pay lower rates of interest.
Senior notes are a common way for companies to borrow money with lower interest than other kinds of debt. When notes are redeemed for company shares, they reduce the businesses’ debt obligations.
“Bombardier’s continued focus on prioritizing debt and net leverage reduction has given our company momentum and enhanced flexibility,” Bart Demosky, Bombardier’s executive vice president and CFO explained in a news release. “This latest $100 million prepayment, deploying cash generated from operations, further underscores Bombardier’s commitment to improving its capital structure.”
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 stock (TSX:BBD.B) last traded at C$56.95 per share. Though 3.68 per cent higher in the past month, the stock has given back 16.62 per cent year-over-year, and has risen 1,978.47 per cent over the past five years.
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