Nippon Steel said it has raised ?600 billion ($3.9 billion) from an upsize sale of convertible bonds ¡ª the biggest Japanese offering of its kind ¡ª to help repay loans taken out for its acquisition of United States Steel.
Japan¡¯s largest steelmaker sold debt mainly in Europe and Asia, it said in a filing with the Finance Ministry, but didn¡¯t offer any in the United States. Half of the bonds, which can be converted into stock, are set to mature in 2029, and the remainder, in 2031, according to the filing.
Nippon Steel shares slumped as much as 6% on Wednesday. The company earlier sought to raise ?550 billion from the zero-coupon bonds. They carry a conversion premium of 10% above Tuesday¡¯s closing price for the 2029 tranche and 11% for the 2031 tranche.
Investors expressed enough interest to buy all bonds on offer, people familiar with the matter said, shortly after the company started taking investor orders.
Japanese companies have been increasingly turning toward convertible bonds to raise funds as the prospects of a surge in fiscal spending and central bank rate hikes increase the cost of traditional debt instruments. Convertible bonds have been on the upswing around the globe. Asian companies raised $9.3 billion last month, the best January since 2018.
Nippon Steel¡¯s bridging loan of about ?2 trillion ¡ª secured to fund the company¡¯s acquisition of U.S. Steel ¡ª is approaching maturity in June. The Japanese company 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 U.S.
The outstanding balance on the bridging loan has been reduced to around ?1.3 trillion, 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 in December 2025 from March the same year.
Nomura Holdings, Goldman Sachs Group and Bank of America are arranging the deal, the terms show.
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