Nidec Secures $3.9 Billion Credit Line, Easing Liquidity Fears

Core Points - Nidec Corp. secured a ¥600 billion ($3.9 billion) credit line from MUFG Bank Ltd. and SMBC, alleviating liquidity concerns amid ongoing accounting investigations [1][4] - The credit line consists of two unsecured bilateral contracts of ¥300 billion each, valid for one year starting November 7, leading to a 5% rise in Nidec's stock [2] - Nidec's shares and bonds faced pressure after evidence emerged in September of senior executives' involvement in accounting issues, resulting in a downgrade of its long-term rating by Moody's from A3 to Baa1 [3][4] Financial and Market Impact - The commitment line agreement is expected to ease equity market concerns regarding Nidec's liquidity, separate from its existing unused borrowing framework [4] - Nidec was designated as a "security on special alert" by the Tokyo Stock Exchange, which could lead to a lengthy process to prove its internal management system's adequacy [5][6] - The company withdrew its annual profit guidance, canceled its share buyback program, and suspended its interim dividend for the fiscal year ending March 2026, marking its first midterm payout suspension in over 25 years [8]