Nissan Motor Company plans to sell US$ 5 billion in debt to help fund its recovery strategy under its new CEO Ivan Espinosa, according to reports in Japan. The bond issue is part of a broader financing initiative to get the struggling Japanese automaker back on track.
Nissan confirmed that it plans to sell JPY 150 billion (US$1 billion) worth of convertible bonds for investment in new products and technologies, as part of the fundraising programme. Reports, citing Fitch Ratings, also suggested that the automaker plans to raise a further JPY 600 billion (US$ 4 billion) in unsecured US$- and EUR-denominated bonds for general corporate purposes, with the debt likely to be given a BB rating. This includes a GBP 1 billion (US$ 1.36 billion) syndicated loan guaranteed by UK Export Finance.
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These efforts are part of Nissan’s broader efforts to raise more than JPY 1 trillion, which include plans to sell and lease back its Yokohama headquarters in Japan. According to reports, the company is facing a “huge loan repayment wall” next year.
An industry analyst in Japan suggested that Nissan will need to convince global capital markets “why it needs to raise capital” and show evidence that its industrial restructuring programmes and capital structure adjustments are being implemented and are working. Nissan is struggling to keep up with growing competition in most global markets, particularly from other Asian manufacturers – including fast-growing Chinese brands and South Korea’s Hyundai-Kia. The company needs to revamp its aging product line-up and step up its efforts to expand in the zero-emissions vehicle segment
