Credit rating agency Moody’s has slashed senior unsecured debt ratings for US aerospace giant Boeing and its subsidiary after the company reported financial losses due to the grounding of its popular 737 MAX jets.

Moody’s, one of the leading international agencies, downgraded its ratings for Boeing and Boeing Capital Corporation from A3 to Baa1 and warned that Boeing and its subsidiary “remain on review for downgrade.”

However, the plane maker managed to keep its short-term rating at Prime-2, which the credit agency is not going to change at this time.

Boeing’s Q4 earnings indicate significantly higher cash burn in 2020 than previously anticipated, increasing reliance on debt for funding the impact of a lower-for-longer recovery of the MAX program,” Moody’s senior vice president and lead analyst Jonathan Root said in a statement on Friday.

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The agency expects that it will take Boeing up to three years to restore the production system of its ill-fated 737 MAX jets and that this will require additional costs. Even if the plane manufacturer manages to get the greenlight from aviation regulators to get the aircraft back in the skies by mid-spring, the crisis will still result in “significant negative free cash flow near $10 billion in 2020,” according to Moody’s.

“The review for downgrade mainly reflects the ongoing uncertainty of when the US Federal Aviation Administration (FAA) will unground the MAX and the potential financial impact of various associated risks,” the agency said.

It added that financial costs linked to the worldwide groundings could lead to a rating downgrade to Baa2, as the US company could issue more debt.

On Wednesday, Boeing announced that it had lost $636 million in 2019 – the company’s first annual loss in 22 years – as its once-bestselling plane remains grounded after being involved it two crashes that left 346 people dead.

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