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Bond Market News
Nissan Seeking Tesla’s Investment; Downgraded to Ba1
February 24, 2025
Nissan Group has drawn up plans to seek investment from Tesla for support, according to a report by Financial Times. The proposal involves a consortium, with Tesla as the largest backer, potentially including a minority investment from Hon Hai Precision Industry (Foxconn) to prevent a full takeover. The deal comes after Nissan’s partnership with Honda ended earlier this month, leaving the company in search of a new partner. Despite skepticism from industry experts who question the value for Tesla in acquiring Nissan’s legacy assets, the proposal is led by Hiromichi Mizuno and supported by ex-Prime Minister Yoshihide Suga. However, Elon Musk immediately appeared to reject the idea, but his comments came after Nissan’s shares had closed in Tokyo at ¥458.80 ($3.08), its highest level since early January. Nissan’s credit rating was downgraded by a notch to Ba1 from Baa3 by Moody’s, making it a fallen angel. The downgrade reflects concerns about Nissan’s weakening credit profile, particularly in its free cash flow and EBIT margin within its automotive business. The negative outlook considers the risks linked to Nissan’s ongoing restructuring plan, the renewal of its aging product lineup, and global trade policies.
Nissan’s bonds traded positive up by 0.2-0.5 points with its 5.55% 2029s at 96.87 cents on the dollar, yielding 6.35%.
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