Nissan begins 1st dollar bond sale in 2 decades

TOKYO • Nissan Motor Co kicked off the sale of its first non-convertible dollar bonds in at least two decades, as the Japanese carmaker starts a global rush to boost finances after its biggest loss in about 20 years.

The carmaker is selling four dollar bonds as long as 10 years, ahead of a debut public euro offering as soon today, according to people familiar with the matter. The Yokohama-based company has already received financial backing from the state-controlled Development Bank of Japan Inc, according to local media reports over the weekend, and in July priced ¥70 billion (RM2.8 billion) of notes in its home market.

Nissan, which allied with Renault SA in 1999 and later also with Mitsubishi Motors Corp, is cutting jobs and capacity as the pandemic hits demand, while seeking to revive an ageing line-up and improve margins at the same time. For the current fiscal year through March, Nissan is forecasting a ¥470 billion operating loss.

The automaker has been mired in turmoil since the 2018 arrest of former chairman Carlos Ghosn. The company’s ratings have also suffered and S&P Global Ratings cut Nissan’s credit score to just one level above junk in July.

From an investment perspective, Nissan may be difficult as a regular high-grade credit given its current ratings but the company can probably garner interest from high-yield bond buyers overseas, according to Masayuki Tsujino, a senior fund manager at Asahi Life Asset Management Co.

Nissan already has sufficient liquidity but has decided to further strengthen its finances as the company is undertaking business structural reforms, according to Azusa Momose, a spokeswoman at the carmaker. Having access to a broad base of investors is also important, she said.

The dollar deal includes three- year notes being marketed at an initial price guidance of about 325 basis points (bps) over Treasuries, and 10-year bonds at 437.5bps to 450bps, according to the people. The bench- mark-sized deal also includes five-year and seven-year securities.

Nissan’s planned euro sale includes three bonds as long as eight years. — Bloomberg