Nissan Secures $1.2 Billion Revolving Credit Line from Citibank

Strategic Insights -

Nissan Motor, a struggling Japanese vehicle maker, has taken a significant step towards addressing its financial woes by securing a $1.2 billion revolving credit line from Citibank. As part of its effort to restructure its balance sheet, Nissan will also establish a three-year Y250 billion ($2.3 billion) credit line with Fuji Bank, the Industrial Bank of Japan, and Sumitomo Bank. This move comes amidst a rapidly expanding syndicated loan market in Japan, where Citibank has played a pioneering role since 1997.

Key Takeaways:

  • Nissan has secured a $1.2 billion revolving credit line from Citibank, a US financial group, to help address its financial difficulties.
  • The credit line is available in Japan, the US, and Europe, setting it apart from earlier loans that were only available in Japan.
  • Nissan will also establish a three-year Y250 billion ($2.3 billion) credit line with Fuji Bank, the Industrial Bank of Japan, and Sumitomo Bank.
  • The move comes amidst a rapidly expanding syndicated loan market in Japan, where Citibank has pioneered the market since 1997.
  • Total volume of syndicated loans in Japan is expected to reach $100 billion for the year, more than double the previous year's total.
  • Nissan's move is part of its effort to clean up its balance sheet by shifting from long-term to short-term liabilities, following the injection of Y543 billion by Renault in May 1999.
  • The syndicated loan market in Japan has grown rapidly since 1997, with banks like Fuji and IBJ dominating the sector.

Statistics:

  • $1.2 billion: The amount of the revolving credit line secured by Nissan from Citibank.
  • $2.3 billion: The equivalent value of the three-year Y250 billion credit line established by Nissan with Fuji Bank, the Industrial Bank of Japan, and Sumitomo Bank.
  • $100 billion: The expected total volume of syndicated loans in Japan for the year.
  • 1997: The year when Citibank pioneered the syndicated loan market in Japan.
  • 1998: The year when Fuji and IBJ helped arrange Nissan's previous short-term commitment line worth Y500 billion.
  • May 1999: The month when Renault injected Y543 billion into Nissan.

Sources:

  • Source: Nissan Motor, as reported in Financial Times, October 25, 1999
  • Source: Additional reporting by Gillian Tett, Financial Times, October 25, 1999