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Bombardier prices $1.4 bln senior notes offering at 8.75 pct

Published 2016-11-16, 06:28 p/m
© Reuters.  Bombardier prices $1.4 bln senior notes offering at 8.75 pct
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Nov 16 (Reuters) - Bombardier Inc BBDb.TO priced its offering of $1.4 billion senior notes at 8.75 percent, as the Canadian aircraft and train maker raises funds to refinance some of its debt.

The company said it intends to use the net proceeds and cash on hand to redeem its outstanding 7.50 percent senior notes due March 2018 and 5.50 percent senior notes due September 2018. had no choice but to refinance at a higher rate to conserve cash for its plane programs, an analyst who covers the company said on Wednesday.

"It was the only decision really," said the analyst, who spoke on condition that his name not be published.

"They'll have to grin and bear it. It's clearly a higher cost of debt that will go into the models," he said.

The offering comes amid a sell-off in US Treasuries since Donald Trump was declared president-elect on Nov. 8.

Bombardier is currently burning cash as it seeks certification for its ultra long-range Global 7000 business jet and ramps up production of its now money-losing CSeries narrowbody jets which are only expected to break even in 2020.

The company in June signed a long-expected deal with Quebec for the Canadian province to invest $1 billion in its CSeries aircraft program, which has struggled with years of delays and cost overruns.

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