Tuesday, May 5, 2009

The Debts of the Lenders: Japanese Ministers Consider Further Loans to Nissan and Orix

The all powerful MITI (Ministry of International Trade and Industry) that commands the zaibatsu industrial infrastructure of Japanese economics and politics is currently hearing appeals from supplicants. MITI is entwined w/the nation's banking system.

If US equity shorts are complaining about govt interference, just imagine what trading life is like in Japan. How much do you want to bet that they can get the money?

TOKYO (Nikkei)--Nissan Motor Co. (7201.TO) and Orix Corp. (8591.TO) are each seeking an additional Y100 billion or so in emergency government loans provided through the Development Bank of Japan, The Nikkei reports Wednesday.

Nissan, which has already borrowed Y50 billion under the program, has informed the government and the DBJ that it wants to receive additional funding. The automaker is thought to be aiming to roll over part of its debt procured through commercial paper and other instruments.

Initiated in December, the program offers long-term loans at low interest rates. Applications surged in the run-up to March 31, when many firms close their books. The government has decided to make an additional Y8 trillion available for lending for a total of Y10 trillion.

Although the capital markets are returning to normal after last autumn's turmoil, companies with declining earnings or low credit ratings are still having difficulty raising funds. Demand for government loans remains high, with Japan Airlines Corp. (9205.TO) also tapping the program again, this time for around Y200 billion.

The government plans to guarantee follow-up loans to certain large companies, and Nissan and the others would likely fall into this category. Because such guarantees put taxpayers on the hook for potential defaults, the government will require applicants to submit solid business plans and, if necessary, demand accountability from managers.


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