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Pricing Supplement dated February 18, 2015
(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/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: 89236TCD5
Principal Amount (in Specified Currency): $25,000,000
Trade Date: February 18, 2015
Original Issue Date: February 20, 2015
Stated Maturity Date: February 13, 2020
Interest: The Notes will initially bear interest at a fixed rate of 1.50% per annum from the Original Issue Date to but excluding February 13, 2018. Thereafter, the Notes will bear interest at the Floating Rate.
Interest Payment Dates: Each February 13, May 13, August 13, and November 13, beginning May 13, 2015
Issue Price: 100.00% of Principal Amount
Net Proceeds to Issuer: 99.70% of Principal Amount
Agent’s Discount or Commission: 0.30% 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: 1.50% per annum
Fixed Rate Commencement Date: Original Issue Date
Fixed Rate Period: Original Issue Date to but excluding February 13, 2018
Floating Rate:
Floating Interest Rate Basis: LIBOR
Designated LIBOR Page: Reuters Page “LIBOR01”
Floating Rate Period: February 13, 2018 to but excluding Stated Maturity Date
Spread (+/-): + 0.40%
Spread Multiplier: N/A
Index Maturity: 3 month
Index Currency: U.S. Dollars
Maximum Interest Rate: N/A
Minimum Interest Rate: N/A
Interest Reset Dates: During the Floating Rate Period, each February 13, May 13, August 13, and November 13, beginning February 13, 2018
Interest Determination Date: The second London Banking Day preceding each Interest Reset Date
Day Count Convention: 30/360
Business Days: New York, London
Business Day Convention: Following, unadjusted
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
Settlement: The Issuer expects that delivery of the Notes will be made against payment therefor on the Original Issue Date. Under Rule 15c6-1 of the Securities Exchange Act of 1934, as amended, trades in the secondary market generally are required to settle in three Business Days, unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the Notes more than three Business Days prior to the Original Issue Date will be required to specify alternative settlement arrangements to prevent a failed settlement and should consult their own investment advisor.
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 1.50% per annum during the Fixed Rate Period and 3-month LIBOR plus 0.40% following February 13, 2018. 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). Any consequences resulting from the Medicare tax on investment income are not addressed in this discussion or the section of the Prospectus Supplement titled “United States Federal Income Taxation.”
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.
As discussed in the Prospectus Supplement under “United States Federal Income Taxation—Recent Legislation,” legislation commonly referred to as “FATCA” generally imposes a withholding tax of 30% on payments to certain non-U.S. entities (including financial intermediaries) with respect to certain financial instruments, unless various U.S. information reporting and due diligence requirements have been satisfied. This legislation will apply to the Notes. Under final Treasury regulations, withholding (if applicable) will apply to payments of interest and, for dispositions after December 31, 2016, to payments of gross proceeds from the disposition (including upon retirement) of the Notes. We will not pay additional amounts with respect to any such withholding taxes. You should consult your tax adviser regarding the potential consequences of FATCA with respect to your investment in the Notes.
For other U.S. federal income tax consequences of owning and disposing of the Notes, please see 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.