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Pricing Supplement dated February 21, 2014
(To Prospectus dated March 1, 2012 and
Prospectus Supplement dated March 2, 2012)
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TOYOTA MOTOR CREDIT CORPORATION
Medium-Term Notes, Series B - Fixed Rate/Capped Floating Rate
Capitalized terms used in this Pricing Supplement that are defined in the Prospectus Supplement shall have the meanings assigned to them in the Prospectus Supplement.
CUSIP: 89236TBE4
Principal Amount (in Specified Currency): $60,000,000. TMCC may increase the Principal Amount prior to the Original Issue Date but is not required to do so.
Initial Trade Date: February 21, 2014
Original Issue Date: February 26, 2014
Stated Maturity Date: February 26, 2016
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Interest:
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The Notes will initially bear interest at a fixed rate of 0.50% per annum from the Original Issue Date to but excluding February 26, 2015. Thereafter, the Notes will bear interest at a floating rate.
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Interest Payment Dates: Each February 26, May 26, August 26, and November 26, beginning May 26, 2014
Issue Price: 100.00% of Principal Amount
Net Proceeds to Issuer: 100.00% of Principal Amount
Agent’s Discount or Commission: 0.00% of Principal Amount
The Agent or its affiliates will enter into swap transactions with TMCC to hedge TMCC’s obligations under the Notes. The Agent and its affiliates expect to realize a profit in connection with these swap transactions. See “Use of Proceeds and Hedging” below.
Agent: Barclays Capital Inc.
Agent’s Capacity: Principal
Interest Calculation:
Fixed Rate:
Fixed Interest Rate: 0.50% per annum
Fixed Rate Commencement Date: Original Issue Date
Fixed Rate Period: Original Issue Date to but excluding February 26, 2015
Floating Rate:
Floating Interest Rate Basis: LIBOR
Designated LIBOR Page: Reuters Page “LIBOR01”
Floating Rate Period: February 26, 2015 to but excluding Stated Maturity Date
Spread (+/-): + 0.15%
Spread Multiplier: N/A
Index Maturity: 3 month
Index Currency: U.S. Dollars
Maximum Interest Rate: 1.50% per annum
Minimum Interest Rate: 0.00% per annum
Interest Reset Dates: During the Floating Rate Period, each February 26, May 26, August 26, and November 26, beginning February 26, 2015
Interest Determination Date: The second London Banking Day preceding each Interest Reset Date
Day Count Convention: Actual/360
Business Days: New York, London
Business Day Convention: Following
Notice of Redemption: N/A
Repayment: N/A
Optional Repayment Date(s): N/A
Repayment Price: N/A
Original Issue Discount: See “United States Federal Income Taxation” below.
Specified Currency: U.S. dollars
Minimum Denominations: $1,000 and $1,000 increments thereafter
Form of Note: Book-entry only
Calculation Agent: Barclays Bank PLC
RISK FACTORS RELATING TO THE NOTES
Investing in the Notes involves a number of risks. See the risks described in “Risk Factors” beginning on page S-1 of the Prospectus Supplement and those set forth below. Accordingly, prospective investors should consult their financial and legal advisors as to the risks entailed by an investment in the Notes and the suitability of the Notes in light of their particular circumstances.
The Interest You Receive May Be Less Than The Return You Could Earn On Other Investments.
The interest you earn on the Notes will never exceed 0.50% per annum during the first year and 1.50% per annum following the first year regardless of the level of three month LIBOR. The interest that you receive on the Notes may be less than the return you could earn on other investments.
Inclusion Of Projected Profit From Hedging Is Likely To Adversely Affect Secondary Market Prices.
Assuming no change in market conditions or any other relevant factors, the price, if any, at which the Agent is willing to purchase the Notes in secondary market transactions will likely be lower than the Issue Price, because the Issue Price included, and secondary market prices are likely to exclude, the projected profit included in the cost of hedging the obligations under the Notes. In addition, any such prices may differ from values determined by pricing models used by the Agent, as a result of dealer discounts, mark-ups or other transaction costs.
UNITED STATES FEDERAL INCOME TAXATION
This discussion applies only to initial investors in the Notes who purchase the Notes at the “issue price,” which will equal the first price at which a substantial amount of the Notes is sold to the public (not including bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The Notes will be treated as “variable rate debt instruments” for U.S. federal income tax purposes. It is expected that the Notes will not be issued with original issue discount. However, whether the Notes are issued with original issue discount, and the amount thereof, will be determined as of the issue date. If the Notes are issued with original issue discount, information regarding the annual accrual of original issue discount on the Notes will be filed on Form 8281 with the Internal Revenue Service, which makes this information publicly available.
If the Notes are not issued with original issue discount, all stated interest on the Notes will be taxable to a U.S. Holder (as defined in the Prospectus Supplement) as ordinary interest income at the time it accrues or is received in accordance with the holder’s method of tax accounting. If the Notes are issued with original issue discount, a U.S. Holder will be required to include the original issue discount in income for federal income tax purposes as it accrues, in accordance with a constant-yield method based on a compounding of interest. Under these rules, a U.S. Holder will be required to recognize less interest income over the period in which fixed-rate payments are made than the aggregate amount of those fixed-rate payments. The portion of each fixed-rate payment that is not treated as interest income will be treated as a return of the U.S. Holder’s investment in the Notes that will reduce the U.S. Holder’s basis in the Notes. During the period in which floating-rate payments are made, the U.S. Holder will recognize more interest income than the aggregate amount of those floating rate payments. Both U.S. and non-U.S. persons considering an investment in the Notes should read the section of the Prospectus Supplement titled “United States Federal Income Taxation.”
USE OF PROCEEDS AND HEDGING
The net proceeds from the sale of the Notes will be used as described under “Use of Proceeds” in the accompanying prospectus supplement.
To provide a hedge to TMCC, an affiliate of Barclays Capital Inc. will enter into a swap agreement with TMCC. Under the swap agreement, TMCC will make payments linked to the London interbank offered rate in respect of a notional principal amount equal to the aggregate principal amount of the Notes during the term of the Notes in exchange for receiving payments equal to interest due in respect of the Notes from the affiliate of Barclays Capital Inc.