By Scott Murdoch and David Dolan
SYDNEY/TOKYO (Reuters) -Japan’s Nissan Motor plans to sell $4 billion worth of U.S. dollar- and euro-denominated senior unsecured bonds, showed a term sheet reviewed by Reuters on Monday.
The plan comes about a week after Reuters reported that Nissan has asked some suppliers to allow it to delay payments to free up short-term funds, highlighting its scramble to boost cash.
The automaker aims to sell five-, seven- and 10-year dollar bonds and raise a minimum of $750 million in each tranche.
It has told prospective investors that coupons would be in the mid-7% area for the five-year tranche, high-7% area for the seven-year tranche and low-8% area for the 10-year tranche, the term sheet showed.
Nissan also plans a four- and eight-year euro issuance with a minimum size of 500 million euro ($588.40 million) in each tranche.
It has set price guidance at high 5% for the four-year bond and high 6% for the eight-year bond, the term sheet showed.
Nissan said it also plans to sell a 150 billion yen ($1.04 billion) six-year convertible bond.
The automaker plans to use money raised to refinance outstanding debt, the term sheet showed.
Last year Nissan raised $300 million in a five-year dollar bond priced at 5.55%.
It issued a five-year dollar bond in March 2021 worth $800 million that had a coupon of 2% and is now trading at 6.0584%, LSEG data showed. A seven-year bond issued at the same time worth $600 million with a coupon of 2.75% is now at 6.599%.
JUNK DEBT
Hit by deteriorating sales and an ageing vehicle lineup, Nissan reported a $4.5 billion net loss for the financial year that ended in March. It has declined to disclose a forecast for the year through March 2026.
The automaker faces some 700 billion yen in debt due this financial year. Its debt has been cut to “junk” by all three major credit-rating firms.
Fitch in a report on Monday said Nissan’s credit profile was weaker than similarly rated automakers such as General Motors, Ford Motor and Stellantis.
It said Nissan’s operating and free cash flow margins had been lower recently and were weak for its rating.
“However, its low leverage and maintenance of a net cash position are considered strong for its current rating and compare well with higher-rated peers,” Fitch said.
Nissan’s new CEO Ivan Espinosa has unveiled a sweeping restructuring plan that includes closing seven of 17 plants globally and cutting some 15% of the workforce.
Any further credit rating downgrades could complicate future fundraising plans, Nissan said in a June stock exchange filing.
($1 = 0.8498 euros)
($1 = 144.7900 yen)
(Reporting by Scott Murdoch; Editing by Jacqueline Wong and Christopher Cushing)
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