Nissan Motor completed a $4.52 billion bond sale this week, securing crucial funding as the Japanese automaker confronts its worst financial crisis since near-bankruptcy a quarter-century ago. The emergency capital raise comes at a steep price, with one dollar note tranche carrying a yield of 8.125%, topping its previous record yield of 7.5% for a 10-year US currency debt issued in 1986.
The distressed borrowing underscores Nissan’s deteriorating financial position after reporting a $4.5 billion net loss for the fiscal year ended March. All three major credit-rating firms have cut its debt to “junk” status, while the company scrambles to address some 700 billion yen in debt due this financial year.
Despite the punitive interest rates, the offering attracted about $11 billion in orders, suggesting investor appetite for high-yield paper in current market conditions. The issuance included $3 billion in U.S. dollar tranches with 5-, 7-, and 10-year maturities, plus €1.3 billion in four- and eight-year European tranches.
The fundraising supports Nissan’s aggressive “Re:Nissan” restructuring plan, which includes eliminating 20,000 jobs representing approximately 15% of its workforce and closing seven of 17 plants globally by 2027. The company targets 500 billion yen in total cost savings versus fiscal 2024 to restore profitability.
Recent reports indicate Nissan has asked suppliers to delay payments to free up short-term funds, highlighting its cash flow pressures. Any further credit rating downgrades could complicate future fundraising plans, according to company filings.
