Cash-strapped Japanese automaker Nissan recently raised USD 4.52 billion in senior unsecured bonds denominated in US dollars and euros. The proceeds will now be used for debt refinance. The announcement was made nearly a week after media reports revealed Nissan’s desperate attempt to raise cash by asking some suppliers to postpone payments in order to free up short-term funds.
As per a term sheet examined by Reuters, three US dollar tranches with maturities of five, seven, and ten years raised USD 3 billion, while another 1.3 billion euros (USD 1.52 billion) were issued in four and eight-year tranches. Five-year US dollar bonds were priced at 355 basis points (bps) higher than Treasuries, seven-year bonds at 360 bps, and ten-year bonds at 376 bps.
According to the term sheet, the coupons for the five-year, seven-year, and ten-year tranches are 7%, 7%, and 8%, respectively. HSBC, Citi, and Bank of America were joint book runners for the bond sales. With debt totalling approximately 700 billion yen (USD 4.76 billion) due this fiscal year, the Japanese automaker has been downgraded to “junk” status by all three major credit rating agencies.
Meanwhile, a report by Automotive News claims that Nissan is postponing the production of two electric crossovers at its Canton, Mississippi, plant by ten months because of the United States’ declining demand for electric vehicles. A new legislation comes after new legislation that will stop providing federal EV tax credits after September 2025, which will affect automakers’ strategies and consumer interest.
The EVs, which were first scheduled for 2025, have experienced numerous delays and changes in plans; Nissan has cancelled its earlier plans for electric sedans because of dwindling sedan sales. Several next-generation electric vehicles will eventually be produced at the Canton facility, which presently produces gasoline models.
Notwithstanding the setbacks, Nissan intends to unveil its e-Power hybrid system in the Rogue and a revised Leaf by the end of 2025. However, Infiniti is still having trouble with a shortage of new products in the face of declining sales.
Nissan is also reportedly in discussions to supply vehicles to Honda Motor in the United States, leveraging its underutilised Canton plant in Mississippi to produce Honda-branded pickup trucks. As per the Nikkei Asia, this potential partnership follows the collapse of merger talks earlier 2025, which aimed to create the world’s third-largest automaker.
Despite the failed merger, both companies remain committed to collaborating on projects, particularly in electric vehicles (EVs) and other innovative technologies, as they navigate rising competition from Chinese automakers and complex US-Japan trade negotiations.