---
title: "Nissan’s debt-default risk jumps to highest since March 2023"
description: "A gauge of Nissan Motor Co.’s debt-default risk jumped after the Japanese automaker slashed its profit outlook and said it will dismiss 9,000 workers, boosting concern about the firm’s credit health."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Newsdeck"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2024-11-08-nissans-debt-default-risk-jumps-to-highest-since-march-2023/"
published: "2024-11-08T05:22:45"
updated: "2024-11-08T05:22:47"
lang: "en-ZA"
word_count: 236
---

# Nissan’s debt-default risk jumps to highest since March 2023

> A gauge of Nissan Motor Co.’s debt-default risk jumped after the Japanese automaker slashed its profit outlook and said it will dismiss 9,000 workers, boosting concern about the firm’s credit health.

By Bloomberg · Published 8 November 2024, 07:22 SAST · Updated 8 November 2024, 07:22 SAST

## Key points
- Nissan's financial woes have sent its bond insurance costs soaring and its stock price plummeting, as the carmaker grapples with a perfect storm of internal strife and a tough automotive market, prompting analysts to downgrade its credit outlook faster than you can say "turnaround strategy."
- Nissan's bond insurance costs hit 180 basis points, marking a significant rise and becoming Japan's fourth highest CDS.
- The automaker faces mounting challenges, prompting cuts to payroll, production, and profit forecasts after a ¥448.3 billion cash burn.
- Mizuho Securities downgraded Nissan's credit outlook to "slightly negative," anticipating declining profitability amid tough market conditions.
- With a junk rating from S&P and the lowest investment grade from Moody’s and Fitch, Nissan's financial health remains precarious.

## Content

The cost to insure Nissan’s bonds against nonpayment is indicated at 180 basis points on Friday morning, according to a credit-default swap trader. It surged about 13 basis points to 178 on Thursday, the highest since March 2023, CMA data show. The carmaker’s CDS overtook Sharp Corp.’s contracts last month to become Japan’s fourth highest, according to the data.

Nissan has struggled to cope with tougher car industry conditions and address internal weaknesses, forcing it to [reduce](https://www.bloomberg.com/news/articles/2024-11-07/nissan-cuts-outlook-announces-restructing-with-9-000-job-cuts) payroll, production and profit forecasts. Nissan also will sell off some of its stake in Mitsubishi Motors Corp. after burning through ¥448.3 billion ($2.9-billion) in cash the last six months. Its share price plunged as much as 10% in early Friday trading.

Mizuho Securities Co. lowered its credit outlook for Nissan to “slightly negative” from “stable”, analyst Kengo Koetaka wrote in a report. He cited expectations that the profitability of Nissan’s automotive business will decline from the current fiscal year to the following year ending March 2026 due to the deterioration of the business environment in the US and the company recording one-off expenses associated with its turnaround.

[See also: Nissan Shares Drop on Profit Warning, Plan to Slash Output (1)](https://www.bloomberg.com/news/articles/2024-11-08/nissan-slashes-outlook-pares-production-and-will-cut-9-000-jobs-m3808d0p)

Nissan has the lowest investment grade from Moody’s and Fitch and a junk rating of BB+ from S&P. Local rating firms Rating & Investment and Japan Credit Rating Agency both give it an A score, the sixth-highest level.