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28 Apr 2011
Tokyo, April 28, 2011 -- Moody's Japan K.K. has confirmed the Baa2 issuer ratings
of Nissan Motor Co., Ltd. (Nissan) and its supporting
subsidiaries.
The ratings outlook is stable.
This concludes the review for possible upgrade initiated on February 14,
2011.
The ratings for the following entities are affected:
Nissan Motor Co., Ltd.
Nissan Capital of America, Inc.
Nissan Motor Acceptance Corporation
Nissan Intl. Finance (Netherlands) B.V.
Nissan Financial Services Co., Ltd.
The aftermath of the March 11 earthquake has triggered the rating action
-- a shortage of components and electricity power issues
will negatively affect Nissan's earnings recovery in the upcoming
quarters.
Moody's expects production to return to normal within the year,
however, it is concerned about the uncertainty regarding the quake's
aftermath and the strength of Nissan's earnings recovery thereafter.
Nissan's outlook is stable. Moody's expects the effects
of the quake to be negative on its earnings at least in the short term;
however, the current rating is able to accommodate this outcome
because Nissan can maintain its global market competitiveness and return
profitability to reasonable levels over the medium term.
Before the quake, Nissan's earnings improved in terms of its
unit sales growth due to the market recovery, its rising market
share, and cost savings. In addition, the company's
automobile business attained a positive net cash position.
After rebuilding its damaged facilities, Nissan is still faced with
electricity supply issues and a components supply shortage.
Its domestic rivals recently announced that their production would return
to normal by the end of the year. However, Moody's
also believes that Nissan's production will also return to normal
within the year.
Electricity supply is improving and TEPCO has revised its electricity
supply projection upwards, although this may continue to be a risk
factor for Nissan because its production facilities have high exposure
to TEPCO's electricity supply area.
Components supply is more important because it significantly influences
the global supply chain. A major supplier of semiconductor chips
for automobile manufacturers (that Moody's believes is one of the
important bottlenecks), announced that it would move forward its
restart date at a damaged factory to June 15 from mid-July as previously
projected. However, it is still unclear how quickly the overall
supply chain will return to normal.
Upward rating pressure could re-emerge if Nissan's earnings
return to the recovery path that Moody's expects. Moody's
may consider a positive rating action if Nissan keeps its unadjusted operating
profit margin above 5%. Improvements in Renault's
financial performance and creditworthiness could also positively affect
Nissan's ratings.
On the other hand, factors which could trigger a downgrade include
(1) sizable investments or share buybacks, and which raise leverage
significantly, (2) if the relationship between Nissan and Renault
were to grow closer, in particular on the financial side,
or if Renault's financial situation weakens materially, potentially
impacting Nissan's own financial strength, and (3) Nissan's
brand deteriorates and its market share falls. The rating could
also be downgraded if Nissan's operating margin drops and remains below
3% for two consecutive years.
The principal methodology used in this rating was "Global Automobile Manufacturer
Industry", published on September 30, 2010, and available
on www.moodys.co.jp.
Nissan Motor Co., Ltd., headquartered in Yokohama,
is a leading global automobile manufacturer and is 43.4%
owned by Renault S.A.
REGULATORY DISCLOSURES
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, parties not involved in the ratings,
public information, confidential and proprietary Moody's information.
Measures taken to ensure the quality of this information include use of
public information, reviews by a third party and verification by
the lead analyst.
Moody's considers the quality of information available on the issuer
or obligations satisfactory for the purposes of maintaining a credit rating.
Moody's adopts all necessary measures to ensure that the information it
uses in maintaining a credit rating is of sufficient quality and from
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independent third parties. However, Moody's is not an auditor
and cannot in every instance independently verify or validate information
received in the rating process.
Credit ratings are Moody's current opinions of the relative future credit
risk of entities, credit commitments, or debt or debt-like
securities. Moody's defines credit risk as the risk that an entity
may not meet its contractual, financial obligations as they come
due and any estimated financial loss in the event of default. Credit
ratings do not address any other risk, including but not limited
to: liquidity risk, market value risk, or price volatility.
Credit ratings do not constitute investment or financial advice,
and credit ratings are not recommendations to purchase, sell,
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rating due to insufficient information, or for other reasons.
Moody's Japan K.K. is a credit rating agency registered
with the Japan Financial Services Agency and its registration number is
FSA Commissioner (Ratings) No. 2. The Financial Services
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in the past year.
Please see ratings tab on the issuer/entity page on the Moody's
website for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Credit Ratings were fully digitized and accurate
data may not be available. Consequently, Moody's provides
a date that it believes is the most reliable and accurate based on the
information that is available to it. Please see the ratings disclosure
page on the Moody's website for further information.
Please see the Credit Policy page on the Moody's website for the
methodologies used in determining ratings, further information on
the meaning of each rating category and the definition of default and
recovery.
Tokyo
Tadashi Usui
Vice President - Senior Analyst
Corporate Finance Group
Moody's Japan K.K.
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100
Tokyo
Shinsuke Tanimoto
Senior Vice President - Team Leader
Corporate Finance Group
Moody's Japan K.K.
JOURNALISTS: (03) 5408-4110
SUBSCRIBERS: (03) 5408-4100
Moody's Japan K.K.
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Moody's confirms Nissan's Baa2 ratings, outlook stable
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
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Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.” Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. 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MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000. MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.
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