Toyota Motor Corp. is seeking a 1 trillion yen ($9 billion) line of credit from Sumitomo Mitsui Banking Corp. and MUFG Bank Ltd., people familiar with the matter said, as the automaker ensures it has ample funding if necessary with the coronavirus pandemic intensifying across the world.
Although Japan’s biggest automaker has the strongest credit profile among the country’s car manufacturers, its cost of credit is going up. On Thursday, Moody’s Investors Service cut Toyota’s credit rating to A1 from Aa3, and put it under review for a further downgrade. The rating firm also downgraded the ratings of other global auto giants.
(Also read: Coronavirus: Carmakers across the world warned of coming ‘credit shock’)
Representatives for the banks weren’t immediately available for comment. Kyodo News reported on the credit line earlier on Friday.
“We continually evaluate our funding needs," said Kensuke Ko, a spokesman for Toyota. “At this moment nothing has been decided regarding the report."
Toyota is planning to halt output at seven production lines at five factories starting from April 3. The carmaker has also suspended operation at a site in India after the government asked residents to stay home. It has halted production in North America and countries such as France, the U.K., the Philippines and Brazil, as industries worldwide suspend manufacturing sites amid work and movement restrictions.
(Also read: Coronavirus: Ford, Fiat, Honda, Toyota seek to restart North American plants)
The virus outbreak may shave 170 billion yen from the profits of Japan’s top five automakers, according to a report by Goldman Sachs Group Inc. earlier this month.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.