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After announcing significant layoffs last week and forewarning the impact of ongoing strikes on its business, the cash-strapped Boeing is preparing to raise tens of billions of dollars in a self-rescue effort.

On Tuesday, October 15th, Eastern Time, Boeing announced plans to raise up to $25 billion through the issuance of stocks and bonds. This is part of Boeing's effort to strengthen its balance sheet by utilizing the so-called shelf registration system.

Under U.S. securities regulations, under the shelf registration system, issuers can submit a registration statement to the U.S. Securities and Exchange Commission (SEC) before a public offering, indicating that they have no intention of immediately selling all registered securities. Instead, it allows the issuer to make multiple offerings under the same effective registration, including initial and secondary offerings.

Boeing stated in its announcement:

"This universal shelf registration provides flexibility, allowing the company to seek various capital options as needed over three years to support the company's balance sheet."

At the same time, Boeing also disclosed in another document that it has signed a "supplemental credit agreement" with several large banks, obtaining a loan of $10 billion from these banks, stating that "this credit arrangement provides additional short-term liquidity for us to deal with a challenging environment. The company has not yet utilized this credit arrangement or existing revolving credit."

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It is currently unclear when and in what sizes Boeing plans to issue stocks and bonds to raise funds over the next three years. Sources familiar with the matter told The Wall Street Journal that Boeing is expected to issue stocks to raise $10 billion. Bank of America analyst Ron Epstein released a report on Tuesday stating that BofA expects Boeing to issue stocks first, which should support the company's balance sheet in the short term while retaining the option for future debt financing, thereby reducing the risk of credit rating downgrades.

In April of this year, the international credit rating agency Moody's downgraded Boeing's credit rating from Baa2 to Baa3, just one level above the so-called "junk" rating, and gave a negative rating outlook, indicating a possible downgrade to junk status. Since then, Wall Street analysts have estimated that Boeing needs to raise between $10 billion and $15 billion to maintain its rating and avoid becoming junk.

Last Friday, when announcing a layoff of about 10%, Boeing released preliminary estimates of its third-quarter financial data, expecting third-quarter revenue of $17.8 billion, a loss of $9.97 per share under GAAP, the largest quarterly loss in nearly four years, an operating cash flow loss of $1.3 billion, and cash and marketable securities investments of $10.5 billion at the end of the quarter, which can meet the minimum operational requirements.

Boeing stated that, partly due to strikes, the initial delivery of the 777X aircraft is expected to be delayed by one year to 2026. Due to the impact of strikes and other factors, the pre-tax costs of civil aircraft programs such as the 777X total $6 billion. This is the first time Boeing has disclosed the impact on aircraft delivery and financial conditions after a month of continuous employee strikes. Since the strike, Boeing has "burned" $1 billion, and the company still carries a net debt of $45 billion.Last month, Moody's and two other international credit rating agencies, Fitch and S&P, all warned that if the strike that began on September 13th continued for a long period, it might lead to a downgrade of Boeing's rating.

Fitch said at the time that if the strike lasted for a week or two, it was unlikely to affect the rating, but if it lasted longer, it could have a substantial impact on Boeing's operations and finances, increasing the risk of a rating downgrade. Moody's stated that if Boeing had any equity issuance alongside debt issuance to meet liquidity requirements, including the funds needed to repay approximately $12 billion in debt maturing by the end of 2026, its rating would be downgraded. S&P said that an extended strike could delay Boeing's recovery and harm the overall rating.

On Tuesday this week, both Fitch and S&P indicated that issuing stocks and bonds might help Boeing retain its investment-grade credit rating. Fitch said that Boeing's statement on Tuesday would "increase financial flexibility and alleviate short-term liquidity concerns." S&P stated: "The additional credit arrangements also seem to be a prudent precaution."

However, some analysts are not convinced. For example, Nick Cunningham, an analyst at Agency Partners, believes that Boeing's shelf registration-related announcements are vague and broad, coupled with the necessity of temporary financing, which means that there is difficulty for banks to pitch Boeing to potential investors or lenders. He suspended his recommendation and target price for Boeing's stock.

After announcing the financing plan and credit agreement, Boeing's stock rebounded on Tuesday, closing up more than 2% against the market trend, performing the best among Dow Jones components, but still down more than 40% for the year.