Business Maverick: Nissan suffers blow with S&P cutting credit to junk

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Nissan Motor Co’s credit rating was slashed to junk by S&P Global Ratings, the latest setback for a motoring company that’s struggled to boost profitability in the years following former chairman Carlos Ghosn’s arrest and the industry’s pivot toward ...

The Japanese vehicle manufacturer’s credit rating was cut by a notch to BB+ by S&P, which said a strong recovery in profit and sales was “unlikely” and cited persistent supply chain turmoil and high costs in the industry.

“Performance at the company has been sluggish for more than three years,” S&P said in a statement. “We now expect its earnings will remain weaker than we previously assumed given the prospect of another difficult year in 2023.” Nissan’s profitability will continue to lag behind its competitors for the next one to two years, S&P added. The agency said it expects supply chain issues to persist, delaying any recovery in sales across the US and Europe, and pressure companies to lower prices.

Japanese bond issuers with junk ratings include SoftBank Group Corp. and Rakuten Group, which have BB+ and BB from S&P, respectively. The cost to insure Nissan Motor’s debt against default jumped after S&P Global Ratings lowered the motoring company’s credit rating to junk.

 

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