Nichicon Corporation, the Kyoto-based capacitor and power-electronics maker, told the Tokyo Stock Exchange on September 2, 2026 that it will raise ¥22.165bn through a euro-yen convertible bond maturing in 2031, then use nearly all of a linked ¥5bn share-buyback authorization the very next day to offset the dilution the bond could eventually cause.
The bond carries no coupon and is priced to favor the issuer as much as investors: it is sold at 103.25% of face value while Nichicon books payment of only 100.75%, with the ¥22.0bn face amount redeemed in full at maturity on September 18, 2031. Sold in overseas markets centered on Europe and Asia, excluding the US, with Daiwa Capital Markets Europe as sole bookrunner, the bond generally cannot convert to equity unless Nichicon's stock trades above 130% of the conversion price for 20 consecutive trading days in a given quarter, a restriction that holds until three months before maturity, with exceptions tied to a ratings downgrade, an early-redemption notice, a corporate reorganization or a bond-pricing "parity event". Nichicon can also, between September 2030 and mid-2031, call in bonds from holders who submit an acquisition-election notice, paying cash at face value plus shares for any conversion value above face; that option limits, rather than removes, how much conversion could eventually reach the market.
| Feature | Detail |
|---|---|
| Gross proceeds / face amount | ¥22.165bn raised against a ¥22.0bn face amount |
| Coupon | Zero coupon |
| Price mechanics | Issued at 103.25% of face value; Nichicon receives payment of 100.75% |
| Maturity | Redeemed at 100% of face value on September 18, 2031 |
| Conversion trigger | Stock must clear 130% of the conversion price for 20 consecutive trading days in a quarter, with exceptions for certain rating, redemption-notice and reorganization periods; restriction applies until three months before maturity |
| Company buyout option | Callable between September 2030 and mid-2031 for bondholders who submit an election notice, settled in cash at face value plus shares for any value above face |
| Linked buyback | Up to ¥5bn, or 3.35% of shares outstanding excluding treasury stock, bought in a single ToSTNeT-3 session on September 3, 2026 |
Most of the proceeds are earmarked for capacitors feeding artificial-intelligence infrastructure. Roughly ¥17bn will fund three capacity expansions through the fiscal years ending March 2028 and March 2029: ¥7bn for large aluminum electrolytic capacitors aimed chiefly at AI-server power supplies, ¥5bn for conductive-polymer hybrid aluminum electrolytic capacitors serving telecoms and automotive demand, and ¥5bn for factory space supporting Nichicon's NECST business, which makes power supplies for medical, accelerator and fusion-energy equipment.
The remaining ¥5bn funds the buyback Nichicon's board approved the same day: up to 2,248,000 shares, or 3.35% of shares outstanding excluding treasury stock, to be bought in a single ToSTNeT-3 off-auction session on September 3. Nichicon has already fixed the mechanics for that session: 1,922,300 shares at the September 2 closing price of ¥2,601, worth ¥4,999,902,300, all but exhausting the cap in one order, with results due after the session closes. Because that trade lands before the bond's own payment date of September 18, Nichicon says it will fund it initially from cash on hand and reimburse itself once bond proceeds arrive; any part of the ¥5bn left unspent because of market conditions would instead go toward repaying long-term borrowings due by March 2029.
The pairing delays and limits dilution risk rather than removing it. The buyback retires at most 3.35% of shares outstanding, a fraction of what the bond could eventually create if Nichicon's stock rallies well past its conversion trigger. Separately, if a tender offer, delisting or similar reorganization event hits Nichicon before 2031, the bond's early-redemption provisions could force it to pay out as much as 280% of the bonds' face value, a real cost distinct from the acquisition clause's own face-plus-conversion-value payout. As of July 31, Nichicon already held 2,841,615 treasury shares against 67,158,385 shares outstanding excluding treasury stock, the base this new financing sits on top of.