As it navigates a challenging turnaround, Nissan Motor Co. has announced plans to raise $4 billion through a multi-currency bond sale—its most ambitious capital market move in recent years. The issuance, comprising both U.S. dollar- and euro-denominated senior unsecured bonds, is part of a broader effort by the Japanese automaker to shore up short-term liquidity and restructure existing debt.
Bond Details: A Multi-Tranche, Global Strategy
Nissan plans to issue U.S. dollar bonds across three maturities—five, seven, and ten years, aiming to raise at least $750 million per tranche. According to investor guidance, coupon rates are expected in the mid-7% range for the five-year notes, high-7% for the seven-year, and low-8% for the ten-year.
The company is also targeting European investors with four- and eight-year euro bonds, each expected to raise a minimum of €500 million, priced in the high-5% to high-6% range, respectively. In parallel, Nissan plans to issue a ¥150 billion ($1.04 billion) six-year convertible bond in the domestic market.
Strategic Objectives
Proceeds from this capital raise will be directed toward refinancing maturing debt, including roughly ¥700 billion ($4.85 billion) due in the current fiscal year. With all three major credit agencies having downgraded Nissan to junk status, the cost of borrowing has risen sharply. The bond yields reflect this higher risk premium — a marked increase from Nissan’s earlier fundraising efforts, such as the 2021 dollar bonds issued at just 2–2.75% coupons.
This bond issuance follows reports that the company recently sought extended payment terms from suppliers, further highlighting short-term liquidity pressures.
The Bigger Picture: Financial Fragility Meets Operational Reform
Nissan reported a net loss of $4.5 billion for the fiscal year ending March 2025, driven by declining global sales, an aging product lineup, and competitive setbacks. While its leverage remains comparatively low — a factor Fitch noted positively in a recent report — both free cash flow and operating margins remain underwhelming for its rating tier.
Adding to the complexity, new CEO Ivan Espinosa has launched a major restructuring effort. The company aims to shut down seven of its 17 global plants and cut 15% of its workforce in a bid to realign its cost base and reposition the brand.
Yet, risks loom. Nissan has not issued forward financial guidance for FY 2025–26, and internal filings suggest any further credit downgrades could hamper future capital access. With debt markets now pricing Nissan alongside distressed issuers, investor confidence remains fragile.
365247 Insight: Tactical Raise or Last Resort?
Nissan’s latest bond plan is a clear move to stabilize its balance sheet in the short term — but it also raises red flags around long-term competitiveness and capital flexibility. The company must now convince stakeholders that this fundraising effort is part of a structured rebound, not a survival mechanism.
If the restructuring plan delivers measurable progress — particularly in core markets like the U.S., China, and Europe — Nissan could re-enter the investment-grade conversation. But in the meantime, it will need to manage rising capital costs, cautious suppliers, and wary shareholders.
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IMAGE: Reuters
