BOEING’s US$20 billion-plus capital raise delivered four banks a hefty payday just as equity market issuance began to cool ahead of the US election.
Goldman Sachs, Bank of America, Citigroup and JPMorgan are each expected to earn as much as US$75 million for their roles as lead joint bookrunners on the equity raise, based on the Boeing’s filings with the US Securities and Exchange Commission. That accounts for close to 80 per cent of the total fee pool being shared by the roughly 20 banks that worked on the deal.
Representatives for Boeing, Goldman Sachs, Bank of America, Citigroup and JPMorgan declined to comment.
Boeing this week raised about US$23.5 billion in an expanded capital raising in an effort to shore up its balance sheet and stave off a potential credit rating downgrade to junk. The sale was one of the largest ever of its kind by a public company. It comprised a roughly US$18.5 billion common share sale, including the overallotment shares sold by the underwriters later in the week, and US$5 billion of depositary shares representing a stake in mandatory convertible preferred stock.
Other banks that worked on the sale included Wells Fargo, BNP Paribas, Deutsche Bank and Morgan Stanley. Those companies were listed as joint bookrunning managers.
Sales of new and existing shares, including initial public offerings (IPOs), are having their best year since the IPO boom in 2021, data compiled by Bloomberg show. But activity during the traditional post-Labour Day window has slowed as companies steel themselves for Tuesday’s (Nov 5) US presidential election. BLOOMBERG
