(Bloomberg) -- Boeing Co.’s annual interest costs could rise by at least $100 million if its credit rating is cut to junk, adding to its troubles as it navigates stalled union talks and seeks to shore up fresh capital.

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The planemaker’s credit rating is already on the cusp of junk and is being reviewed for downgrade at both S&P Global Ratings and Moody’s Ratings. For every step its ratings are cut by Moody’s or S&P, its borrowing costs will rise by 25 basis points, or 0.25 percentage point.

These provisions are included on about 72% of its roughly $53 billion of long-term debt, so every 25-basis point increase adds about $100 million to the company’s borrowing costs.

“It’s meaningful for sure, but in the context of a large company like Boeing - this is not what they would primarily be concerned with, in our view” said CreditSights analyst Matt Woodruff.

Boeing has been working to maintain its investment-grade status. It’s considering raising at least $10 billion by selling shares, Bloomberg reported earlier this month, a way to boost cash flow while avoiding adding more debt to its balance sheet.

A representative for Boeing declined to comment.

Boeing paid $2.5 billion in interest expenses last year, according to regulatory filings. But a downgrade would make it more costly to refinance its $12 billion of debt coming due in the next two years. If both Moody’s and S&P cut Boeing by one step, the planemaker’s borrowing costs will rise by 50 basis points. The maximum increase is 1 percentage point per credit grader.

So-called fallen angels — industry parlance for a blue-chip company downgraded to junk — face higher interest rates when entering the high-yield universe. Walgreens Boots Alliance Inc. paid an 8.125% coupon on its first high-yield bond sale this year, which was substantially higher than what it paid during its life as an investment-grade company.

Downgrade Watch

Boeing received its second negative ratings watch Tuesday from S&P as its growing cash needs suffer from a strike by machinists. Moody’s put them on downgrade watch last month.

After two credit graders downgrade a company to junk, it often makes it ineligible for inclusion in the biggest high-grade corporate bond indexes, forcing many investors to sell their bonds. That usually dramatically boosts a company’s future funding expenses.

Reuters reported that banks have pitched the company on selling common stock as well as other related instruments, such as preferred equity and mandatory convertible securities, that can be treated as equity-like by ratings firms.

Boeing has faced growing financial pressure after a door-size panel blew off an airborne 737 Max 9 in early January, a near-catastrophe that brought greater scrutiny by US regulators. The company was forced to slow down production of its 737 Max, its biggest cash generator, and other commercial aircraft as it worked to improve its manufacturing processes. The strike has brought production of Boeing’s cash-cow Max jetliner to a standstill for more than three weeks.

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