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The Development Bank of Japan extended a record ¥130 billion ($1.2 billion) to Nissan Motor Co. in May with a guarantee that the government will repay most of it in case of a default by the struggling automaker, sources familiar with the matter said Monday.

The guarantee is part of the ¥180 billion loan that Nissan received from the state-affiliated financial institution to weather the impact of the novel coronavirus pandemic. Under the arrangement, if the automaker defaults on the loan, the government will shoulder up to 80 percent, or about ¥100 billion, of the guaranteed portion, using taxpayers’ money.

The pandemic has dealt a further blow to sales at Nissan — already hurt by restructuring following the expansion pursued by former boss Carlos Ghosn, who was ousted amid allegations of financial misconduct.

The DBJ judged that the loan should be extended swiftly due to the potential impact from Nissan’s woes on local economies such as jobs at suppliers, according to the sources.

Nissan reported a net loss of ¥671.22 billion in the business year that ended in March, the first full-year red ink in 11 years.

In March, the government launched a system to extend loans to companies stung by the coronavirus outbreak via financial entities such as the DBJ.

While the DBJ provided about ¥1.8 trillion in loans to large and midsized companies as of the end of July, the loan to Nissan is the only one with a state guarantee, the sources said.

During the financial crisis following the collapse of Lehman Brothers, Japan Airlines Co. took out a loan of about ¥67 billion in 2009. It defaulted on the loan the following year when the carrier went bankrupt, causing the state to shoulder about ¥47 billion.

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