Mazda to Seek Japan’s Aid After Being Shut Out of Bond Market
By Naoko Fujimura and Tetsuya Komatsu
March 17 (Bloomberg) -- Mazda Motor Corp., burdened with the second-worst credit rating among Japan’s carmakers and a 62 percent surge
in short-term borrowing this fiscal year, plans to apply for government aid as it consumes cash.
“We can’t sell bonds right now,” said Nobuyoshi Tochio, general manager of Mazda’s financial services division. “The market isn’t functioning. Conditions are really bad.”
Mazda, Japan’s second-largest car exporter, used 174 billion yen ($1.8 billion) in cash last quarter as sales of Mazda6 sedans have plunged in the U.S. and Europe.
The Hiroshima-based company may turn to the government for low- interest loans as its junk rating prevents it from following Toyota Motor Corp. in tapping capital markets. < wrong - nobody can afford the offered interest rates >
“Mazda needs loans from the government badly, as it’s vulnerable,” said Koichi Ogawa, chief portfolio manager, at Daiwa SB Investments Ltd. in Tokyo, which manages $28 billion.
“The company is important to the local economy, so it should be able to get them.”
Mazda’s short-term borrowings including leases, loans and bonds due this year surged to 221 billion yen in the nine months ended December, exceeding the company’s untapped 200 billion yen credit line.
The carmaker expects a 13 billion yen loss for the year ending this month and analysts forecast the loss will almost triple to 37.5 billion yen next fiscal year.
The company may apply < like all the others >
to the Japan Bank for International Cooperation and Development Bank of Japan, both government-owned,
for < effectively almost 0% interest >
- loans to bolster its cash position, Mazda’s Tochio said in an interview on March 13 in Tokyo. -
To contact the reporter on this story: Naoko Fujimura in Tokyo at firstname.lastname@example.org
; Tetsuya Komatsu in Tokyo at email@example.com
Last Updated: March 17, 2009 04:47 EDT