Nissan Motor Co., Ltd., the Japanese company, has revealed its intention to issue unsecured Nissan bonds denominated in both dollars and euros, with a total value amounting to $4 billion, according to a document reviewed by Reuters.
This move comes about a week after reports indicated that Nissan had asked some suppliers to defer payments to provide short-term financing, a clear sign of its efforts to secure urgent cash liquidity.
Through this issuance, Nissan aims to sell dollar-denominated bonds with maturities of five, seven, and ten years, with a minimum limit for each tranche set at $750 million. The terms document indicates that the coupon yield for the five and seven-year tranches will be 7%, while the rate will rise to 8% for the ten-year tranche.
The company also plans to issue euro-denominated bonds with maturities of four and eight years, with a minimum of €500 million for each tranche, setting a maximum guidance yield of 5% for the shorter maturity and 6% for the longer one.
In addition to this step, the company announced its intention to sell convertible Nissan bonds totaling 150 billion Japanese yen, equivalent to $1.04 billion, for a six-year term. Nissan aims to use the proceeds collected from these bonds to refinance its debts due during the current fiscal year, which amounts to 700 billion yen.
These moves come at a time when the company is experiencing financial pressure, especially after announcing a net loss of $4.5 billion for the fiscal year ending in March. Major credit rating agencies have downgraded Nissan's debt rating to "junk," which increases borrowing costs and places Nissan bonds under the scrutiny of cautious investors.
