Nippon Steel Corp shares tumbled 5.5% in Tokyo trading Wednesday after the company announced plans to sell $3.9 billion in zero-coupon convertible bonds to help fund its $15 billion acquisition of U.S. Steel Corp. The Japanese steelmaker's shares fell to 627.2 yen, making them the worst performers on the Nikkei 225 index despite broader market gains. The bond sale represents the largest corporate bond issuance in Japanese history.

The company is attempting to refinance its U.S. Steel acquisition while simultaneously planning 6 trillion yen in investments over the next five years to drive growth. However, investors reacted negatively to the size of the bond issuance, which could eventually dilute shareholder value since the convertible bonds can be exchanged for shares at a predetermined price. The market concerns were amplified by Nippon Steel's recent financial challenges, including a widened net loss forecast of 70 billion yen for the current fiscal year.

The acquisition of U.S. Steel has been a high-profile deal for Nippon Steel, but the massive bond sale has raised questions about the company's financial flexibility and debt burden. The steelmaker is still dealing with costs related to the U.S. Steel acquisition and a fire at one of its blast furnaces that contributed to its deteriorating financial outlook. Investors appear increasingly concerned about the company's ability to manage its growing debt load while pursuing its expansion strategy.