Boeing, Goldman’s new bond offerings show strong investor demand.


The Federal Reserve Bank invests in corporate bonds to stimulate the economy.
Boeing has seen steady demand for its recent bond issue in the midst of the pandemic.
Goldman also offers a high-yield corporate bond, which tracks the FTSE Goldman Bond Index.

In recent weeks, the bond market has undergone dramatic changes, mainly triggered by the coronavirus pandemic. Private and government support has helped to keep the market afloat and the efforts seem to be bearing fruit.

Fixed-income earners who want to invest in corporate bonds will benefit from a recent Federal Reserve Bank easing program. Boeing (NYSE: BA), America’s largest aircraft manufacturer, has already reported a significant increase in demand following its recent bond issue.

According to a CNBC report, “demand for new Boeing debt was strong across multiple maturities. In the middle of the report, Boeing shares rose 3% to the highs of the day”.

Sources familiar with the aircraft manufacturer’s paper pointed out that the high demand for the company’s bond could amount to $75 billion in 5-, 7-, 10-, 20-, 30- and 40-year bonds.

“Boeing is interested in increasing its new debt to $20 billion, but given the increased demand, the company may be looking for more now,” the sources said.

Boeing is one of the companies that has successfully floated lucrative debt on the stock market before, and this round could not be otherwise, especially given the Fed’s efforts to boost the economy. Netflix (NASDAQ: NFLX) and Delta (NYSE: DAL) have also issued debt to boost growth amid the current economic slowdown.

The ETF from Goldman Sachs

While the Fed is stepping in to buy corporate bonds to keep the economy afloat, the investment bank Goldman Sachs (NYSE: GS) has also launched an ETF, the Goldman Sachs Access Investment Grade Corporate Bond ETF (GIGB), to deliver results consistent with the performance of the FTSE Goldman Sachs Investment Grade Corporate Bond Index.

The Goldman fund aims to invest at least 80% of its assets (excluding securities lending collateral) in bonds included in its index. The rule-based index measures investment grade performance.

The banker offers a high-yield corporate bond, which (before fees and expenses) equals the FTSE Goldman Sachs High Yield Corporate Bond Index. Similarly, this fund aims to invest at least 80% of its assets (excluding securities lending collateral) in bonds included in its index. This index is also rule-based and aims to measure the performance of high-yield (USD-dominated) corporate bonds that meet the underlying key screening and liquidity criteria.


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