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Moody’s Downgrades Nissan’s Credit Rating
Moody’s Investors Service has dropped its credit rating for Nissan Motor Co. by one notch to “A3” and given the company a negative outlook.
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Moody’s Investors Service has dropped its credit rating for Nissan Motor Co. by one notch to “A3” and given the company a negative outlook.
The rating service cites Nissan’s slumping sales, sagging profits and challenges in overhauling its management oversight following last November’s arrest of former chairman Carlos Ghosn’s on charges of financial wrongdoing. Moody’s notes that Nissan also must “stabilize” its 20-year-old alliance with Renault SA.
The same issues prompted S&P Global Ratings to change its outlook for Nissan to negative four days ago. S&P says it also may lower its rating for Nissan if the company fails to boost its EBITDA to about 6% in fiscal 2020.
Like S&P, Moody’s predicts it will take Nissan several years to implement its plan to shift from an emphasis on sales growth to one that focuses on richer profit margins and brand value on a global scale. Moody’s cites the continuing risk of successfully executing that strategy, which will include an overhaul of the company’s product lineup.
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