The Japanese company Nissan will face a significant bond maturity in 2025, raising concerns about its ability to generate cash. In 2025, the company and its subsidiaries will have to pay about 1.6 billion dollars in debt, a figure that will increase to approximately 5.6 billion in 2026, according to data collected by Bloomberg.
This significant rise in bond payments comes at a time when the costs of debt default insurance for the company have reached peak levels and the yield premiums on bonds in yen and dollars have also increased. After cutting 9,000 jobs, Nissan's shares have experienced fluctuations, although the acquisition of a stake in the company by a prominent Japanese investor sparked a rebound.
The possibility that rating agencies will downgrade Nissan's credit rating to junk status has eroded investor confidence. Additionally, the election of Donald Trump as president increases the risk that the United States will impose tariffs on exporters. In this context, an analyst pointed out that Nissan could become a 'fallen angel' and investors might demand additional risk in bond spreads.
Despite these challenges, Nissan has solid liquidity, with over 8.3 billion dollars in net cash at the end of September. The company has also secured credit facilities with major international banks to support its automotive and sales financing businesses.
Although Nissan has relatively low investment-grade ratings, experts indicate that it has various funding sources to address its debt in the coming years. However, the company's automotive division recorded a cash flow deficit during the April to September period, highlighting the need to increase returns for shareholders and develop technologies such as electric vehicles and autonomous driving.
Furthermore, Nissan stands out for having the highest loans relative to its earnings among Japanese automakers. The company's debt-to-earnings before interest, taxes, depreciation, and amortization ratio was 8 in the last quarter, a figure considerably higher than that of other market competitors.
