Nissan Scraps Plan to Offer Yen-Denominated Bonds in June

Nissan Motor Co. has scrapped a plan to offer yen-denominated bonds in June, in what would have been a return to the credit market after delaying a debt sale last year, according to people familiar with the matter.

The Japanese automaker had been targeting an issuance size of 200 billion to 300 billion yen ($1.9 billion to $2.8 billion), people with knowledge of the matter said earlier this month.

“We are considering various fundraising methods,” said Azusa Momose, a spokeswoman for Yokohama-based Nissan. “We can’t comment on any detailed plans for future fundraising.”

Covid-19 has piled extra pressure on Nissan, which was already under strain following the 2018 arrest of former Chairman Carlos Ghosn, who had pushed for volume growth. The automaker posted its biggest lost in 20 years for the year ended March and unveiled a turnaround plan last month to weather a collapse in car demand due to the coronavirus pandemic.

The company postponed a sale of 250 billion yen in corporate notes last September after a compensation scandal led to the ouster of then Chief Executive Officer Hiroto Saikawa, people familiar with the matter said at the time.

Debt Score

Nissan’s credit ratings are at risk of being cut to non-investment grade. Moody’s Investors Service rates the automaker Baa3, one step above junk level, and it’s been placed on review for further downgrade.

The carmaker’s fundamental credit metrics including profit margins and leverage remain weak, and with its recent earnings, it has “little cushion under its rating,” Mariko Semetko, vice president and senior credit officer at Moody’s, said earlier this month.

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