Japan’s Nippon Steel to raise $3.5bn through zero-coupon convertibles

Published February 25, 2026 at 1:10 a.m. UTC

Source: MarketScreener

Nippon Steel Corporation has approved the issuance of JPY550bn, or approximately $3.5bn, in zero-coupon convertible bonds due in 2029 and 2031, as part of a broader refinancing and growth funding plan.

According to a press release issued by the company, the decision was taken by the company’s representative director and president under authority delegated by the board at a meeting on February 17. The bonds, which carry stock acquisition rights, will be issued in two equal tranches of JPY275bn, maturing in 2029 and 2031 respectively. Both tranches will be priced at 100% of principal and carry a 0% coupon, with settlement scheduled for March 12, 2026.

The company said it may increase the aggregate principal amount, subject to maintaining terms consistent with the objectives of the issuance and taking account of investor demand and market conditions. Any such increase would raise the number of stock acquisition rights issued but would not alter the intended use of proceeds. An announcement would be made promptly if the size were revised.

The fundraising forms part of efforts to refinance a bridge credit facility used to fund the approximately JPY2 trillion acquisition of US Steel in June 2025. The company intends to refinance the remaining balance of that facility through permanent financing arrangements, including the convertible bonds and additional debt financing.

Beyond refinancing, Nippon Steel is seeking to underpin an ambitious expansion strategy. It aims to achieve annual underlying consolidated business profits of at least JPY1 trillion and global crude steel production capacity of 100mn tonnes. Over the next five years it expects total capital and business investment of around JPY6 trillion, or about $40bn, including approximately $11bn in capital expenditure at US Steel.

The group said that while it currently maintains a sufficient equity capital base, sustainable medium- to long-term growth will require more diversified financing. Plans include enhancing capital efficiency through operating cash flows and asset disposals alongside debt financing, while securing investment funds and reinforcing the balance sheet to support the next phase of expansion.