TOKYO - Nissan Motor Co. has set up a credit line for ¥550 billion, or about $4.7 billion at current exchange rates, with about 10 banks, including its lead banks, Fuji Bank Ltd. and Industrial Bank of Japan Ltd.
The credit line amounts to a financial safety net against a credit downgrade.
Nissan's domestic commercial paper currently is rated at the lowest level for which there is a functioning secondary market in Japan. If the company's yen debts were downgraded a notch, it would be unable to issue bonds and commercial paper to cover operating costs and would have to tap the line of credit instead.
Nissan is in the midst of a major restructuring after having posted losses in five of the last six years.