-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RY59RKFWRteGGj2qOwSCiFsd9lXXHw9t/ZFcrtTiGiq/ETwnBMTVrvBXVbfDxqSm zxhcp4O7FCeMAyH8HIkEAw== 0000834071-96-000010.txt : 19960430 0000834071-96-000010.hdr.sgml : 19960430 ACCESSION NUMBER: 0000834071-96-000010 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19960429 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOYOTA MOTOR CREDIT CORP CENTRAL INDEX KEY: 0000834071 STANDARD INDUSTRIAL CLASSIFICATION: PERSONAL CREDIT INSTITUTIONS [6141] IRS NUMBER: 953775816 STATE OF INCORPORATION: CA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 033-52359 FILM NUMBER: 96552322 BUSINESS ADDRESS: STREET 1: 19001 S WESTERN AVE STREET 2: PO BOX 2958 FN12 CITY: TORRANCE STATE: CA ZIP: 90509-2958 BUSINESS PHONE: 3107873848 MAIL ADDRESS: STREET 1: 19001 S WESTERN AVE CITY: TORRANCE STATE: CA ZIP: 90509 424B3 1 Pricing Supplement dated April 22, 1996 (To Prospectus dated March 9, 1994 and Rule 424 (b)(3) Prospectus Supplement dated March 9, 1994) File No. 33-52359 TOYOTA MOTOR CREDIT CORPORATION Medium-Term Note - Indexed _______________________________________________________________________________ Face Amount: $25,000,000 Trade Date: April 22, 1996 Issue Price: 100% Original Issue Date: April 29, 1996 Interest Rate: 0.00% Net Proceeds to Issuer: $24,962,500 Interest Payment Date: Not Applicable Discount or Commission: 0.15% Stated Maturity Date: June 30, 1997 _______________________________________________________________________________ Calculation Agent: Goldman, Sachs & Co. Day Count Convention: Not Applicable [ ] 30/360 for the period from to [ ] Actual/Actual for the period from to [ ] Other (see attached) to Redemption: [x] The Notes cannot be redeemed prior to the Stated Maturity Date. [ ] The Notes may be redeemed prior to Stated Maturity Date. Initial Redemption Date: Initial Redemption Percentage: % Annual Redemption Percentage Reduction: % until Redemption Percentage is 100% of the Principal Amount. Repayment: [x] The Notes cannot be repaid prior to the Stated Maturity Date. [ ] The Notes can be repaid prior to the Stated Maturity Date at the option of the holder of the Notes. Optional Repayment Date(s): Repayment Price: % Currency: Specified Currency: U.S. dollars (If other than U.S. dollars, see attached) Minimum Denominations: (Applicable only if Specified Currency is other than U.S. dollars) Original Issue Discount: [ ] Yes [x] No Total Amount of OID: Yield to Maturity: Initial Accrual Period: Form: [x] Book-entry [ ] Certificated
___________________________ An investment in the Notes to which this Pricing Supplement relates presents certain risks that should be carefully considered by investors, including that up to all of the return in excess of the face amount of the Notes will be placed at risk from movements in the exchange rate for U.S. dollars in exchange for Japanese yen. See" Risk Factors." ___________________________ Goldman, Sachs & Co. ADDITIONAL TERMS OF THE NOTES As described below, the exchange rate of the Japanese yen relative to the U.S. dollar will determine the principal amount payable at Maturity; provided that, in no case will the principal amount payable at Maturity be less than 100% of the Face Amount. On April 22, 1996, the spot exchange rate for U.S. dollars in exchange for Japanese yen (expressed in terms of Japanese yen per U.S. dollar) was 106.65, as published by the Board of Governors of the Federal Reserve System in "Statistical Release H.15(519), Selected Interest Rates" under the heading "Yen/dollar Exchange Rate". For further information as to the relative exchange rate of the Japanese yen to the U.S. dollar, see "Risk Factors -- Exchange Rates" and "Historical Data" below. For information concerning certain of the risks attendant to a purchase of the Notes, see "Risk Factors" below. For certain financial and tax consequences to holders of the Notes, see "Hypothetical Indexed Principal Amounts" and "Certain U.S. Tax Considerations" below. The Notes will be issued as a global security in denominations of U.S. $100,000 and any integral multiple of U.S. $1,000 in excess thereof. Principal Payment at Maturity Principal (the "Indexed Principal Amount") payable on the Notes offered by this Pricing Supplement (the "Notes") will be payable in U.S. dollars on the date of Maturity in an amount equal to the greater of (i) the Face Amount, and (ii) an amount determined in accordance with the following formula: Face Amount + [(Face Amount x 28182%) x Average Difference] In calculating the Initial Average Fx Rate, the Ending Average Fx Rate, the Average Spot Rate, the Average Difference and the Indexed Principal Amount, the Calculation Agent will round to the nearest one hundred- thousandth of a percentage point, with five one millionths of a percentage point rounded upwards (e.g. 9.876545% (or .09876545) would be rounded to 9.87655% (or .0987655)), and all dollar amounts used in or resulting from any calculation in respect of the Notes will be rounded to the nearest cent (with one-half cent being rounded upward). For purposes of the Notes, the following terms shall have the following meanings: "Average Difference" means the Initial Average Fx Rate minus the Ending Average Fx Rate. "Average Spot Rate" for any given calendar month means the quotient obtained by dividing (x) the sum of the reciprocals of the spot exchange rate for U.S. dollars in exchange for Japanese yen (expressed in terms of Japanese yen per U.S. dollar), as published by the Board of Governors of the Federal Reserve System in "Statistical Release H.15 (519), Selected Interest Rates" for the 10:00 a.m. New York City time quotation (the "Federal Release") under the heading "Yen/dollar Exchange Rate", as such Federal Release is displayed on the Bloomberg Information Services, Inc. s monitor under "TNFXJYHP" (or on such screen as shall replace such screen on such service for the purpose of displaying the Yen/dollar exchange rate as reported in the Federal Release), for each Business Day during such calendar month, by (y) the number of such Business Days in such calendar month; provided, however, that if such spot exchange rate is not available as aforesaid for any Business Day during any such period, the spot exchange rate for such Business Day shall be the spot exchange rate as determined by the Calculation Agent, by such method as the Calculation Agent determines, in good faith, in its sole discretion. "Calculation Agent" means Goldman, Sachs & Co. TMCC has appointed Goldman, Sachs & Co. as Calculation Agent for the purpose of making the determination of the Average Spot Rates, the Average Fx Rates and the Average Difference. If any then acting Calculation Agent is unable to act as such, TMCC will appoint another agent to act as Calculation Agent; provided that such replacement Calculation Agent shall be a major U.S. money center bank with its principal offices in New York City. All determinations made by the Calculation Agent shall be at its sole discretion and, in the absence of manifest error, shall be conclusive for all purposes and binding on TMCC and the holders of the Notes. "Ending Average Fx Rate" means the amount determined in accordance with the following formula: The sum of: (1/3 x Average Spot Rate for April 1997) plus (1/3 x Average Spot Rate for May 1997) plus (1/3 x Average Spot Rate for June 1997); provided, however, that the last calculation with respect to the spot exchange rate for the purposes of determining the Average Spot Rate for a given calendar month shall be (and include) the second Business Day immediately preceding the Maturity. "Initial Average Fx Rate" means the amount determined in accordance with the following formula: The sum of: (1/3 x Average Spot Rate for April 1996) plus (1/3 x Average Spot Rate for May 1996) plus (1/3 x Average Spot Rate for June 1996). "Maturity" means the date on which the principal of the Notes becomes due and payable, whether at the Stated Maturity Date or by declaration of acceleration or otherwise. "Business Day" means any day, other than a Saturday or Sunday, that is a day on which the Federal Reserve Bank of New York is, as of the Original Issue Date, scheduled to be open to transact business. RISK FACTORS General The Notes are speculative in nature and involve a high degree of risk. An investment in Notes indexed to an exchange rate entails significant risks that are not associated with similar investments in a conventional fixed-rate debt security. The Notes are financial instruments that are suitable only for sophisticated investors who are experienced with respect to derivatives and derivative transactions. The credit ratings assigned to TMCC's Medium-Term Note Program are reflective of TMCC's credit status and, in no way, are reflective of the potential impact of the factors discussed below, or any other factors, on the market value of the Notes. Accordingly, prospective investors should consult their own financial and legal advisors as to the risks entailed by an investment in the Notes and the suitability of such Notes in light of their particular circumstances. For further information, see "Description of Notes -- Indexed Notes" in the accompanying Prospectus Supplement. Return on Investment Because the Notes will not bear interest, a holder s entire return on the Notes will depend on the application of the formula set forth under "Principal Payment at Maturity" to the Face Amount of the Notes which in turn will depend on the exchange rate of the Japanese yen relative to the U.S. dollar for the periods indicated therein. For these reasons, holders of Notes should be prepared to realize no return on their investment in the Notes if the exchange rate moves in a direction adverse to the holders of Notes. Exchange Rates Holders of Notes will receive an Indexed Principal Amount that will be affected by changes in the rate of exchange of the Japanese yen relative to the U.S. dollar. Such changes may be significant. (See, "Historical Data", below.) The Japanese yen/U.S. dollar exchange rate is a function of the supply of and the demand for the applicable currencies. Changes in the exchange rate over time result from the interaction of many factors over which TMCC has no control, including but not limited to, the relative rates of inflation, interest rate levels, commodity prices, the balance of payments between the United States and Japan and other countries and the extent of governmental surpluses or deficits in Japan and the United States. In addition, the exchange rate can also be affected by actual or potential trade disputes between the United States and Japan. All such factors are sensitive to the monetary, fiscal and trade policies pursued by the governments of the United States and Japan, as well as of other countries important to international trade and finance. The imposition or modification of foreign exchange controls by Japan or the United States also could affect exchange rates. In recent years, exchange rates (including the Japanese yen/U.S. dollar exchange rate) have been highly volatile and such volatility may be expected to continue in the future. Fluctuations and trends in the Japanese yen/U.S. dollar exchange rate that have occurred in the past are not necessarily indicative, however, of fluctuations that may occur in the future. Illiquidity of Notes; Secondary Trading in the Notes The Notes are a new issue of securities with no established trading market. The Notes will not be traded on any exchange and there can be no assurance that a secondary market for the Notes will develop or, if developed, will continue or be liquid. Even if a market develops for the Notes, it is expected that transaction costs in any such secondary market will be high. As a result, if Goldman, Sachs & Co. makes a market in the Notes, which it is not obligated to do, the spread between bid and asked prices for Notes may be substantial. The secondary market for the Notes will be effected by a number of factors independent of the creditworthiness of TMCC, including the volatility of the Japanese yen/U.S. dollar exchange rate, the time remaining to Maturity of the Notes, the amount of other securities linked to the Japanese yen/U.S. dollar exchange rate and the level, direction and volatility of market interest rates generally. Such factors also will affect the market value of the Notes. Accordingly, holders of Notes may not be able to sell Notes readily or at prices that will enable holders to realize their anticipated yield. No investor should purchase Notes unless such investor understands and is able to bear the risk that the Notes may not be readily saleable, that the value of the Notes will fluctuate over time and that such fluctuations may be significant. Conflicts of Interest The Calculation Agent and its affiliates engage in trading financial instruments whose value is affected by the Japanese yen/U.S. dollar exchange rate for their proprietary accounts and may trade for other accounts under their management. Such activities could have an effect on the spot bid exchange rate for U.S. dollars in exchange for Japanese yen quoted by the Calculation Agent (used to determine the Average Spot Rate and, in turn, the Indexed Principal Amount) and on the underlying markets. In addition, an affiliate of the Calculation Agent will enter into a swap transaction with TMCC to hedge TMCC's exposure with respect to the Notes and, depending on market movements with respect to the Japanese yen/U.S. dollar exchange rate, may be obligated to pay certain amounts to TMCC with respect to the swap. As a result, the Calculation Agent may have a conflict of interest to the extent that the Calculation Agent's trading activities or the determinations made by the Calculation Agent in respect to the Notes affects the payments due to or from the Calculation Agent's affiliate under the related swap transaction or the value of the investments held by the Calculation Agent's proprietary or managed accounts. HYPOTHETICAL INDEXED PRINCIPAL AMOUNTS Set forth below are examples of the method of calculating the Average Difference based on various assumed Average Spot Rates. In addition, the following table illustrates the percentage of the Face Amount that would be payable at Maturity if the hypothetical Average Difference values (calculated in the examples) were used to calculate the Indexed Principal Amount at Maturity. The information presented in this table is furnished solely for purposes of illustration, and no representation is made that the actual Average Spot Rates and Average Difference values with respect to the Notes will be equal to, less than or greater than any of the hypothetical values indicated. Examples of Calculating Average Difference Average Spot Rates Ex. #1 Ex. #2 Ex. #3 Ex. #4 Apr-96 0.011111 0.009091 0.009174 0.009346 May-96 0.011111 0.009091 0.009091 0.009259 Jun-96 0.011111 0.009091 0.008333 0.009174 Apr-97 0.010000 0.010000 0.008333 0.008696 May-97 0.010000 0.010000 0.007846 0.008621 Jun-97 0.010000 0.010000 0.009434 0.008547 Average Difference = 0.001111 -0.000909 0.000328 0.000639
Scenarios Percentage of Face Amount Payable Average Difference at Maturity Ex #1 0.001111 131.13% Ex #2 -0.000909 100.00% Ex #3 0.000328 109.24% Ex #4 0.000639 118.01%
THE FOREGOING TABLE IS ILLUSTRATIVE ONLY. NO REPRESENTATION IS MADE AS TO WHAT THE AVERAGE DIFFERENCE OR INDEXED PRINCIPAL AMOUNT FOR THE NOTES WILL BE. The actual amount received at Maturity will depend upon the Japanese yen/U.S. dollar exchange rate in effect during the periods contemplated under "Additional Terms of the Notes - Principal Payment at Maturity." Historical data regarding the Japanese yen/U.S. dollar exchange rate for the periods indicated is set forth below. Historical Data The table below sets forth for each of the dates listed, the Japanese yen/U.S. dollar exchange rate spot market midpoint consensus as published by the Board of Governors of the Federal Reserve System in "Statistical Release H.15(519), Selected Interest Rates" under the heading "Yen/dollar Exchange Rate" ("H.15(519) Rate"). The Indexed Principal Amount will be based upon the average of rates over different periods of time as set forth above under "Principal Payable at Maturity", which may vary from the rates calculated in accordance with the preceding sentence. In addition, fluctuations in exchange rates that have occurred in the past are not necessarily indicative of fluctuations that may occur in the future, which may be greater or less than those that have occurred historically. On April 22, 1996, the H.15(519) Rate was 106.65. The Indexed Principal Amount payable at Maturity will be adversely affected by decreases in the exchange rate of Japanese yen for U.S. dollars during the months of April, May and June of 1997 as compared to the exchange rate of Japanese yen to U.S. dollars during the three months of April, May and June of 1996.
Historical Japanese Yen/U.S. Dollar Exchange Rate Date (1) Rate 04Jan95 101.37 11Jan95 99.87 18Jan95 99.53 25Jan95 99.61 01Feb95 99.45 08Feb95 98.78 15Feb95 98.30 22Feb95 97.24 01Mar95 96.73 08Mar95 91.30 15Mar95 90.13 22Mar95 88.91 29Mar95 88.13 05Apr95 85.91 12Apr95 84.03 19Apr95 81.28 26Apr95 83.73
03May95 83.27 10May95 83.47 17May95 86.68 24May95 87.22 31May95 84.90 07Jun95 84.43 14Jun95 84.29 21Jun95 84.23 28Jun95 84.48 05Jul95 84.92 12Jul95 87.53 19Jul95 87.66 26Jul95 87.83 02Aug95 90.85 09Aug95 91.38 16Aug95 97.88 23Aug95 96.28 30Aug95 99.03 06Sep95 98.63 13Sep95 100.32 20Sep95 103.43 27Sep95 99.88 04Oct95 101.05 11Oct95 100.97 18Oct95 100.63 25Oct95 101.31 01Nov95 100.93 08Nov95 100.35 15Nov95 101.13 22Nov95 101.49 29Nov95 101.55 06Dec95 101.45 13Dec95 101.73
20Dec95 101.90 27Dec95 100.75 03Jan96 104.56 10Jan96 104.73 17Jan96 105.72 24Jan96 106.74 31Jan96 107.04 01Feb96 106.89 02Feb96 106.73 05Feb96 105.09 06Feb96 105.37 07Feb96 106.09 08Feb96 106.93 09Feb96 106.94 12Feb96 106.56 13Feb96 106.83 14Feb96 106.81 15Feb96 106.05 16Feb96 105.15 20Feb96 105.95 21Feb96 105.36 22Feb96 105.12 23Feb96 105.08 26Feb96 104.27 27Feb96 104.68 28Feb96 104.53 29Feb96 105.16 01Mar96 105.48 04Mar96 104.93 05Mar96 105.09 06Mar96 105.24 07Mar96 105.42 08Mar96 105.88
11Mar96 105.32 12Mar96 105.70 13Mar96 105.34 14Mar96 105.30 15Mar96 105.54 18Mar96 106.03 19Mar96 106.36 20Mar96 106.53 21Mar96 106.62 22Mar96 106.75 25Mar96 106.14 26Mar96 106.33 27Mar96 106.71 28Mar96 106.43 29Mar96 106.38 01Apr96 107.54 02Apr96 107.40 03Apr96 106.90 04Apr96 106.99 05Apr96 107.44 08Apr96 107.45 09Apr96 108.24 10Apr96 108.38 11Apr96 108.50 12Apr96 108.60 15Apr96 108.38 16Apr96 108.14 17Apr96 108.19 18Apr96 107.60 19Apr96 106.93 _______________
(1) Dates prior to February 1, 1996 are each Wednesday in every week presented. Certain U.S. Tax Considerations The following is a summary of the principal United States federal income tax consequences of ownership of the Notes. The summary concerns initial U.S. Holders (as defined in the Prospectus Supplement) who hold the Notes as capital assets and does not deal with tax consequences to special classes of holders such as dealers in securities or currencies, persons who hold the Notes as a hedge against currency risks or who hedge any currency risks of holding the Notes, tax-exempt investors, U. S. Holders whose functional currency is other than the United States dollar, or persons who acquire, or for income tax purposes are deemed to have acquired, the Notes in an exchange or for property other than cash. The discussion below is based upon the Internal Revenue Code of 1986, as amended, and final, temporary and proposed United States Treasury Regulations. Persons considering the purchase of the Notes should consult with and rely solely upon their own tax advisors concerning the application of United States federal income tax laws to their particular situations as well as any consequences arising under the laws of any other domestic or foreign taxing jurisdiction. Except where otherwise indicated below, this summary supplements and, to the extent inconsistent, replaces the discussion under the caption "United States Taxation" in the Prospectus Supplement. General. There are no regulations, published rulings or judicial decisions involving the characterization, for United States federal income tax purposes, of securities with terms substantially the same as the Notes. Although the matter is not entirely free from doubt and the Notes may be subject to different characterizations by the Internal Revenue Service (the "IRS"), this discussion assumes that the Notes will be treated as debt in their entirety. However, the IRS may assert that a Note should be characterized as creating, in whole or in part, a forward contract or other financial instrument. The Company intends to treat the Notes as debt obligations of the Company for United States federal income tax purposes and when required, intends to file information returns with the IRS in accordance with such treatment in the absence of any change or clarification in the law, by regulation or otherwise, requiring a different characterization. If the Notes are not in fact treated as debt obligations of the Company for United States federal income tax purposes, then the United States federal income tax treatment of the purchase, ownership and disposition of the Notes could differ from that discussed below. U.S. Holders. Under general principles of current United States federal income tax law, payments of interest on a debt instrument generally will be taxable to a U.S. Holder as ordinary interest income at the time such payments are accrued (i.e., determined) or are received in accordance with the U.S. Holder's regular method of tax accounting. In addition, under Section 988 of the Internal Revenue Code of 1986, as amended (the "Code") and the regulations promulgated thereunder, in the case of a debt instrument that provides for payments the amounts of which are determined by reference to the value of one or more nonfunctional currencies (generally, a currency other than the U.S. dollar), any gain or loss realized with respect to such debt instrument by reason of changes in foreign currency exchange rates generally must be treated as foreign currency gain or loss and must be treated as ordinary income or ordinary loss as the case may be, to the extent such foreign currency gain or loss does not exceed the total gain or loss realized on such debt instrument. Although Code Section 988 and the regulations promulgated thereunder do not specifically address the proper treatment of instruments such as the Notes and therefore the matter is not free from doubt, under the foregoing principles upon maturity of a Note, the excess of the Indexed Principal Amount over the Face Amount ("Supplemental Face Amount"), if any, should be treated as contingent interest and generally should be includible in income by a U.S. Holder as ordinary interest on the date that the Indexed Principal Amount is accrued (i.e., determined) or when such amount is received in accordance with the U.S. Holder's regular method of tax accounting. Further, any portion of the Supplemental Face Amount that is attributable to change in foreign currency exchange rates occurring between the Original Issue Date and the determination date should constitute foreign currency gain under Section 988 of the Code and should be treated as ordinary income (other than ordinary interest income). However, if upon maturity the Indexed Principal Amount is equal to the Face Amount, then, under general principles of current United States federal income tax law, a Note should be treated as retired on the date of Maturity for an amount equal to the Indexed Principal Amount, and a U.S. Holder generally would recognize a capital loss under such circumstances in an amount equal to the excess of the U.S.Holder's tax basis in the Note over the Indexed Principal Amount. Any portion of such loss that is attributable to changes in foreign currency exchange rates occurring between the Original Issue Date and the Determination Date should constitute foreign currency loss under Section 988 of the Code and should be treated as ordinary loss. Upon the sale or exchange of a Note prior to the date of Maturity, a U.S. Holder should recognize taxable gain or loss equal to the difference between the amount realized upon such sale or exchange and the U.S. Holder's tax basis in the Note. Such gain or loss should be capital gain or loss which would be a long-term capital loss if the U.S. Holder had held the Note for more than one year. Nevertheless, any such gain or loss realized upon the sale or exchange of a Note prior to the date of Maturity by reason of changes in foreign currency exchange rates occurring between the Original Issue Date and the date of such sale or exchange should constitute foreign currency gain or loss under Section 988 of the Code and should be treated as ordinary income or loss, as the case may be. On December 16, 1994, the United States Treasury Department issued proposed regulations (the "Proposed Regulations") concerning the proper United States federal income tax treatment of contingent payment debt instruments such as the Notes. The Proposed Regulations are proposed to be effective for debt instruments issued on or after 60 days or more after the date on which they are published as final Treasury regulations. Accordingly, if ultimately adopted in their current form, the Proposed Regulations would not apply to the Notes. Proposed Treasury regulations are not binding upon either the Internal Revenue Service or taxpayers prior to becoming effective as temporary or final regulations. In general, if ultimately adopted in their current form, the Proposed Regulations would cause the timing and character of income, gain or loss reported on contingent payment debt instruments such as the Notes to differ from the timing and character of income, gain or loss reported on such instruments under the general principles of current United States Federal income tax law described above. Prospective investors in the Notes are urged to consult their own tax advisors concerning the effect, if any, of the Proposed Regulations on their investment in the Notes. Based upon the current state of the law, the Company, where required, currently intends to file information returns with the IRS reporting interest on and gross proceeds received upon the sale, exchange or retirement of each Note in accordance with the general principles of current United States Federal income tax law described in the three paragraphs following the title "U.S. Holders" above in the absence of any change or clarification in the law, by regulation or otherwise. -----END PRIVACY-ENHANCED MESSAGE-----