Auto Industry to Raise $100 Billion From Banks for Virus Relief

(Bloomberg) -- Global automakers and suppliers are on track to get at least $100 billion of bank financing as the coronavirus pandemic hammers car sales.

Mazda Motor Corp. is the latest to join the rush, with Nikkei reporting that the company is seeking a 300 billion yen ($2.8 billion) loan from Japanese banks. The automaker wasn’t the source of the report and there is nothing that the carmaker can comment on, according to Fumie Tachikake, a Mazda spokeswoman.

Almost all major global automakers have tapped banks for financing since early March -- either making drawdowns from existing facilities or seeking new loans -- as the viral outbreak puts global auto sales on course for a 22% slump this year, based on an IHS Markit Ltd. forecast. The financing is part of a wider global rush, with companies across a host of industries bolstering balance sheets as they confront tumbling sales, shuttered facilities and rising cash burn.

Here’s a summary of major financings in the auto sector:

GM$16b drawdown; $3.6b loan; $2b loan*
Ford$15.4b drawdown
DaimlerEU12b loan
Fiat ChryslerEU6.25b drawdown; EU3.5b loan
RenaultEU5b state-backed loan
Robert BoschEU3b loan; EU500m Schuldschein*
Peugeot (PSA)EU3b new loan
ToyotaJPY1t loan*
NissanJPY500b loan*
MazdaJPY300b loan*
Mitsubishi MotorsJPY300b loan*
  • NOTE: * denotes in pipeline

Mazda asked for loans from MUFG Bank Ltd., Sumitomo Mitsui Banking Corp. and Mizuho Bank Ltd., as well as the government-owned Development Bank of Japan and Sumitomo Mitsui Trust Bank Ltd., according to Nikkei, which didn’t say how it obtained the information. The banks are expected to agree to provide the financing.

Mazda sales fell 33% from a year earlier in March, while output declined 20%. The company had about 500 billion yen in cash and 63 billion yen in securities as of December. It has been able to secure a credit line of about 200 billion yen from Sumitomo Mitsui and other financial institutions, according to Nikkei.

NOTE: To track virus financing across all companies, see Bloomberg News worksheets for America, EMEA and Asia-Pacific.

©2020 Bloomberg L.P.

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