Nissan Set to Raise $10.4 Billion in Two-Day Global Funding Rush

Nissan Motor Co. is set to price its debut public euro bond sale, capping a $10.4 billion global fundraising drive by the loss-making automaker.

The company will sell a 2 billion-euro ($2.4 billion) trio of bonds, after drawing orders more than six times the deal size, according to a person familiar with the matter, who asked not to be identified because they’re not authorized to speak about it. Pricing tumbled on all three tranches during the sale, led by a 60 basis-point plunge for a three-year note.

Investors flocked to an $8 billion bond sale on Thursday as well, as the Japanese carmaker offered comparatively high yields versus similarly rated borrowers, according to Australia & New Zealand Banking Group Ltd. The company has also received a loan from state-controlled Development Bank of Japan Inc., based on media reports, which is helping it pursue a turnaround amid a coronavirus-fueled slump in auto demand, a costly industrywide shift to electric vehicles and the continued fall-out from the arrest of its former head.

“The DBJ loan is implicitly reassuring for investors,” said Toshinobu Chiba, chief portfolio manager for fixed-income investment at Tokyo-based Nissay Asset Management. The dollar offering was “very attractive to investors,” he said.

The four-part dollar sale got at least $22.3 billion of orders and it had new issuance concessions ranging from 25 basis points to 37.5 basis points, based on data compiled by Bloomberg.

Nissan is cutting jobs and capacity to pare costs, while simultaneously seeking to revive an aging lineup and improve margins. The Yokohama-based company, which has alliances with Renault SA and Mitsubishi Motors Corp., is expecting a 470 billion yen operating loss in the fiscal year ended in March.

The automaker has been mired in turmoil since the 2018 arrest of former Chairman Carlos Ghosn. The company’s ratings have also suffered, with a downgrade to just one level above junk at S&P Global Ratings in July.

Nissan already has sufficient liquidity, Azusa Momose, a spokeswoman at the carmaker told Bloomberg News before the bond offerings. Still, it has decided to further strengthen its finances as it is undertaking structural reforms to its business. Having access to a broad base of investors is also important, she said.

The company has an unlisted 150 million euro floating-rate note due in 2021, according to data compiled by Bloomberg.

©2020 Bloomberg L.P.

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