Posted by & filed under Financial Accounting.

Description: Bombardier Ltd is receiving a major infusion of money. In a bond issue that far exceeded expectations, interested purchasers snapped up $1.4 billion U.S. of Bombardier debt. The bond proceeds will be used to pay off two debt issues coming due in 2018, allowing Bombardier to have a bit of breathing room as it continues its efforts to restructure.

Date: November 16, 2016; updated November 17, 2016

Source: theglobeandmail.com

Link: http://www.theglobeandmail.com/report-on-business/strong-investor-interest-spurs-bombardier-to-seek-14-billion-on-bond-market/article32878333/

Discussion Points:

1) What do you think of Bombardier’s strategy of paying off the debt due in 2018 with more expensive debt?

2) Chapter 5 of  Wiley’s  Understanding Financial Accounting, Canadian Edition, discusses Bombardier’s Statement of Cash Flows. What do you think might change on its Statement of Cash Flows as a result of this bond issue?

3)  Where in Wiley’s  Financial Accounting: Tools for Business Decision Making can you learn about accounting for bond retirements?

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