Too Much Junk in the Trunk: S&P Downgrades Nissan's Credit Rating

Often the butt of jokes concerning the types of people that drive its cars, Nissan can’t catch a break. Its long-awaited new EV, the Ariya, was long delayed because of supply chain issues and a global pandemic. Now we’re learning that the automaker’s credit rating recently took a hit. 

S&P Global Ratings, the organization responsible for providing credit ratings on some of the world’s largest corporations, has downgraded Nissan’s credit rating to junk. S&P said the automaker’s lack of innovation and few new products in its pipeline would likely keep its profitability behind its rivals for the foreseeable future.

Nissan will have to pay more to sell foreign currency bonds, and the hit to its credit rating certainly hurts its global reputation, but S&P is not betting on Nissan’s downfall. The organization said the automaker’s outlook is stable and noted that its profitability is slowly returning.

From here, Nissan has two paths ahead of it. If profitability continues improving and sales grow, S&P may upgrade its rating over the next year or so. However, if profitability continues to struggle and cash flow runs dry, Nissan’s credit rating could take another hit, further impacting its standing on the global stage. 

[Image: JuliusKielaitis via Shutterstock]

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