The steelmaker needs capital to expand its overseas operations, including in the US and India, and for decarbonization initiatives. | Photo credit: REUTERS/Issei Kato
The steelmaker is considering making a final decision this month, the sources said, but did not want to be named because the information is not public.
Reuters reports the potential issuance for the first time.
Nippon Steel did not immediately respond to a request for comment.
The convertible bond issuance would be the largest of its kind in Japan at 500 billion yen, according to LSEG data. The issuance amount could be reduced or the plan reconsidered, one of the sources said.
Nippon Steel is in favor of issuing convertible bonds to avoid a capital increase that would entail immediate dilution of the shares. With domestic interest rates rising, it may issue these bonds as zero-coupon bonds, the sources said.
Convertible bonds can be converted into shares at a predetermined price.
The steelmaker needs capital to expand its overseas operations, including in the US and India, and for decarbonization initiatives.
The company also needs long-term financing to replace a bridge loan it took out last year to acquire US Steel, which totaled about 2 trillion yen, the sources said.
The steelmaker’s business performance has deteriorated due to US President Donald Trump’s tariffs on steel imports and competition from exports from China.
The sources also said the Japan Bank for International Cooperation is considering lending money to Nippon Steel for a total of about 1 trillion yen ($6.37 billion).
JBIC did not immediately respond to a request for comment.
Published on February 5, 2026
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