Takata Corp. may be embroiled in the biggest vehicle recall in U.S. history as its air bags have been linked to 11 deaths, but don't count it out as an investment, say credit analysts at Mizuho Securities Co. and Nomura Holdings Inc. who are recommending investors buy its bonds.
The company continues to generate cash from products including seat belts, child seats and steering wheels even as air bag recalls widen, according to Taketoshi Tsuchiya, a senior executive in Mizuho's fixed-income group in Tokyo. Honda Motor Co. and Toyota Motor Corp. remain backers of the auto parts supplier, he said.
"Takata is still generating cash flow and there's no incentive for Honda or Toyota to push it into bankruptcy," Tsuchiya said. "From the technology perspective, the alternative of having to rely on foreign air bag suppliers is totally unacceptable" for the carmakers and the Japanese government, he said.
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