Nippon Steel shares tumble on concern over massive bond sale

Nippon Steel Corp. shares slumped after the company said it planned to sell almost $4 billion of bonds to help fund the acquisition of United States Steel Corp. 

Shares of Japan’s biggest steelmaker fell as much as 5.3% after the open in Tokyo. The company is seeking 600 billion yen ($3.9 billion) from an upsized sale of convertible bonds to help repay bridge loans it took out for the US Steel purchase. 

The debt sale is the largest of its kind ever in Japanese corporate history, Jefferies Japan analysts including Thanh Ha Pham said in a note on Tuesday. “We’d expect potential dilution and debt servicing costs to weigh on the stock,” they said.

Nippon Steel’s bridging loan of about 2 trillion yen is approaching maturity in June. The firm finalized the takeover last year after 18 months of negotiations that became entangled in American politics, and has plans to build a major new steel plant in the US.

The outstanding balance on the bridging loan has been reduced to around 1.3 trillion yen, Chief Financial Officer Takahiko Iwai said in an interview last week, with repayments made using funds raised through yen-denominated hybrid loans and other instruments. The company’s total interest-bearing debt doubled to 5.3 trillion yen in December 2025 from March the same year.

(By Shoko Oda)