May 16 (Nikkei) - Nissan Motor has registered with the Japanese government to issue up to 500 billion yen ($4.7 billion) in bonds within two years to prepare for a possible deterioration of earnings by increasing funds on hand.
The major Japanese automaker, which registered its first corporate bond issue in four years with the Kanto Local Finance Bureau on Friday, is struggling with decreasing new car sales amid the novel coronavirus pandemic. It has prepared structural reform plans including a steep cut in global production capacity.
While details of the planned bond flotation, including the amount and date of issuance, have yet to be worked out, Nissan is considering using the fundraising to finance capital spending and debt repayments. S&P Global Rating has assigned a long-term rating of BBB to the Yokohama-headquartered company.
In August 2019, Nissan registered a bond issue of 250 billion yen. It planned to float the amount the following year but decided to delay the issuance after the exposure of improper overpayments to former President and CEO Hiroto Saikawa.
According to an announcement on April 28, Nissan is expected to have fallen into the red in the 2019 fiscal year ended in March due to a plunge in net income of between 150 billion and 160 billion yen from earlier estimates. The poor result was ascribable to, among other things, decreased auto sales amid restrictions on movement across the world as a result of the coronavirus pandemic.
Excess production capacity, compared with the actual state of auto sales, is also blamed for Nissan's weak performance.
