Nissan to issue $8 billion debt - GulfToday

Nissan to issue $8 billion debt

Nissan-750

New cars at the Nissan factory in Sunderland, UK. File/Reuters

Japan’s Nissan Motor will issue $8 billion in dollar-denominated debt and is considering euro-denominated bonds, it said on Friday, as the troubled automaker looks to diversify its funding.

The bond sale is its first dollar-denominated issuance since its tie-up with France’s Renault in 1999, a Nissan representative said.

It comes as investors have expressed deepening concern about Nissan, which has warned of a record $4.5 billion loss this year as the pandemic hampers its turnaround efforts. Separately, IFR reported Nissan would sell some 2 billion euros ($2.37 billion) in euro-denominated debt. A Nissan spokeswoman said an issuance was under discussion, without confirming the figure.

The company will sell a $1.5 billion, 3-year bond with a coupon of 3.043%, and a $1.5 billion, 5-year bond with a coupon of 3.522%, according to IFR.

Its $2.5 billion, 7-year bond carries a coupon of 4.345% and another $2.5 billion bond, a 10-year, carries a 4.81% coupon, IFR said.

Nissan had pledged to cut 300 billion yen ($2.83 billion)from annual fixed costs and become a smaller, more efficient company. Japan’s second-largest carmaker is trying to recover from a rapid expansion that has left it with dismal margins and an ageing portfolio.

Its business has also been rocked by the arrest of long-time boss Carlos Ghosn.

Meanwhile, Renault may have to cut more costs than initially planned to get out of the red zone and its cash-flow projections are alarming, the French carmaker’s new chief executive said in an internal memo seen by Reuters.

Luca de Meo, a former Volkswagen executive who took over as CEO in July, wrote in the memo to unions and staff that generating cash and restoring profitability was an immediate priority.

Reuters

Related articles