Bombardier bonds drop after US slaps duties on jets
Bonds of Bombardier dropped by as much as five points on Wednesday after the US Commerce Department slapped anti-subsidy duties on some of the company’s jets late on Tuesday.
The department imposed a preliminary 219.63% countervailing duty on Bombardier’s CSeries jets, after US rival Boeing complained that Canada unfairly subsidized the aircraft.
Many of Bombardier’s junk-rated bonds were sharply lower on Wednesday, extending losses earlier in the week, according to MarketAxess data.
The 8.75% 2021s fell by more than five points to as low as 105.125 in early trading - their lowest level since December - before recovering to around 106.25.
Its shares opened 14% lower.
The Canadian train and aircraft manufacturer said it strongly disagrees with the US department’s decision and called the magnitude of the proposed duty “absurd.”