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
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?