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BOMB: Delta To The Rescue

15 April 2016 by lberuti

On the day which marked the official start of the UK EU referendum campaigning period, BOMB ( Bombardier, Inc. ) took a stand again Brexit and told workers the company will be better off if “the UK remains within the EU”. That was not the reason for the 120bps tightening of its risk premium though. Late last night, BOMB was said to be near an agreement to sell as many as 75 C series jetliners to Delta Air Lines. The latter would also be seeking options for 50 more of the single-aisle jets to replace some of the older and smaller planes in its fleet. This would be the biggest sale to date for BOMB’s struggling aircraft program, and equal about half the total orders the manufacturer already has in hand. Delta said today that a final decision has not been made – and chances are that even if BOMB gets the order, it will be painful from a price point of view given Airbus, Boeing and Embraer were also in contention -, but investors nevertheless send BOMB’s 5 year risk premium 55bps tighter at 708bps.