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[LOGO]
PROSPECTUS SUPPLEMENT
(To Prospectus dated March 9, 1994)
$4,090,520,000
TOYOTA MOTOR CREDIT CORPORATION
Medium-Term Notes
Due Nine Months or More from Date of Issue
-----------------
Toyota Motor Credit Corporation ("TMCC") may offer from time to time up to
$4,090,520,000 aggregate principal amount (except that with respect to Notes
sold at a discount, the initial offering price will be used), or the equivalent
thereof in one or more foreign or composite currencies, of its Medium-Term Notes
(the "Notes"). Such Notes are in addition to approximately $2,909,480,000
aggregate principal amount of TMCC's Medium-Term Notes that were issued prior to
the date of this Prospectus Supplement. Each Note will mature on a Business Day
nine months or more from the date of issue, as selected by the purchaser and
agreed to by TMCC, and may be subject to redemption by TMCC or repayment at the
option of the Holder thereof, in each case, in whole or in part, prior to its
Stated Maturity, as set forth therein and specified in a pricing supplement
hereto (each, a "Pricing Supplement").
The interest rate, if any, or the formula for the determination of any such
interest rate, applicable to each Note, the formula, if any, for determining the
principal amount payable upon maturity of each Note and other variable terms of
the Notes as described herein will be established by TMCC at the date of issue
of such Note and will be set forth therein and specified in a Pricing
Supplement. Interest rates, interest rate and/or principal formulae and such
other variable terms are subject to change by TMCC, but no change will affect
any Note already issued or as to which an offer to purchase has been accepted by
TMCC. Each Note will be issued in fully registered book-entry form (a
"Book-Entry Note") or definitive form (a "Definitive Note"), as set forth in the
applicable Pricing Supplement, in denominations of $1,000 and integral multiples
thereof, unless otherwise specified in the applicable Pricing Supplement. Each
Book-Entry Note will be represented by a global security deposited with or on
behalf of The Depository Trust Company (or such other depositary as is
identified in an applicable Pricing Supplement) (the "Depositary") and
registered in the name of the Depositary's nominee. Interests in Book-Entry
Notes will be shown on, and transfers thereof will be effected only through,
records maintained by the Depositary (with respect to its participants) and the
Depositary's participants (with respect to beneficial owners). See "Book-Entry
Notes."
Unless otherwise specified in an applicable Pricing Supplement, the Notes
will bear interest at fixed rates (the "Fixed Rate Notes") or at floating rates
(the "Floating Rate Notes"). The applicable Pricing Supplement will specify
whether a Floating Rate Note is a Floating Rate/Fixed Rate Note or Inverse
Floating Rate Note or whether its rate of interest is determined by reference to
one or more of the CD Rate, the CMT Rate, the Commercial Paper Rate, the
Eleventh District Cost of Funds Rate, the Federal Funds Rate, the J.J. Kenny
Rate, LIBOR, the Prime Rate or the Treasury Rate (each, an "Interest Rate
Basis"), or any other interest rate formula, as adjusted by any Spread and/or
Spread Multiplier and will specify such other terms applicable to such Note. See
"Description of Notes." Interest on Fixed Rate Notes will accrue from their date
of issue and, unless otherwise specified in the applicable Pricing Supplement,
will be payable semiannually in arrears on May 15 and November 15 of each year
and at Maturity. Unless otherwise specified in an applicable Pricing Supplement,
the rate of interest on each Floating Rate Note will be reset daily, weekly,
monthly, quarterly, semiannually or annually, as set forth therein and specified
in the applicable Pricing Supplement, and interest on each Floating Rate Note
will accrue from its date of issue and will be payable in arrears monthly,
quarterly, semiannually or annually, as specified in the applicable Pricing
Supplement, and at Maturity. Notes may also be issued with original issue
discount, and such Notes may or may not currently pay interest.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EX-
CHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT, THE PROSPECTUS OR ANY SUPPLEMENT HERETO. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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PRICE TO PROCEEDS TO
PUBLIC(1) AGENTS' DISCOUNTS AND TMCC(2)(4)
COMMISSIONS(2)(3)
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<S> <C> <C> <C>
Per Note................... 100% .125% - .750% 99.875% - 99.250%
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Total...................... $4,090,520,000 $5,113,150 - $30,678,900 $4,085,406,850 - $4,059,841,100
- ---------------------------------------------------------------------------------------------------------------------------------
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<FN>
(1) Unless otherwise specified in an applicable Pricing Supplement, the Notes
will be issued at 100% of their principal amount.
(2) TMCC will pay a commission ranging from .125% to .750% (or, with respect
to Notes for which the Stated Maturity is in excess of 30 years, such
commission as shall be agreed upon by TMCC and the related Agent at the
time of sale) of the principal amount of a Note, depending upon its Stated
Maturity, to Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman, Sachs & Co., J.P. Morgan Securities Inc. or Lehman
Brothers, Lehman Brothers Inc. (including Lehman Special Securities Inc.)
(each, an "Agent" and collectively, the "Agents") and may sell Notes to an
Agent, as principal, for resale to investors and other purchasers at a
fixed public offering price or at varying prices related to prevailing
market prices at the time of resale, in either case as determined by such
Agent.
(3) TMCC has agreed to indemnify the Agents against, and to provide
contribution with respect to, certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See "Plan of Distribution."
(4) Before deducting expenses payable by TMCC estimated at $1,689,310.
</TABLE>
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The Notes are being offered on a continuing basis by TMCC through the
Agents, who have agreed to use their reasonable efforts to solicit offers to
purchase the Notes. TMCC may also sell Notes to an Agent, as principal, for
resale to investors and other purchasers and has reserved the right to sell
Notes to or through additional agents and directly to investors on its own
behalf. Unless otherwise specified in an applicable Pricing Supplement, the
Notes will not be listed on any securities exchange and there can be no
assurance that the Notes offered by this Prospectus Supplement will be sold or
that there will be a secondary market for the Notes. TMCC reserves the right to
cancel or modify the offer made hereby without notice. TMCC or an Agent, if it
solicits the offer, may reject any offer to purchase Notes in whole or in part.
See "Plan of Distribution."
------------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
J.P. MORGAN SECURITIES INC.
LEHMAN BROTHERS
--------------
The date of this Prospectus Supplement is March 9, 1994.
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DESCRIPTION OF NOTES
The Notes will be issued as a series of debt securities under an Indenture,
dated as of August 1, 1991, as amended by the First Supplemental Indenture,
dated as of October 1, 1991 (the "Indenture"), between TMCC, The Chase Manhattan
Bank, N.A. and Bankers Trust Company. Bankers Trust Company will act as trustee
with respect to the Notes (the "Trustee"). The following summary of certain
provisions of the Notes and of the Indenture does not purport to be complete and
is qualified in its entirety by reference to the Indenture, a copy of which has
been filed as an exhibit to the Registration Statement of which this Prospectus
Supplement and the accompanying Prospectus are a part. Capitalized terms used
but not defined herein have the meanings given to them in the Indenture or the
Notes, as the case may be. The term "Debt Securities," as used under this
caption, refers to all securities issued and issuable from time to time under
the Indenture and includes the Notes. The following description of Notes will
apply unless otherwise specified in an applicable Pricing Supplement.
GENERAL
All Debt Securities, including the Notes, issued and to be issued under the
Indenture will be unsecured general obligations of TMCC and will rank PARI PASSU
with all other unsecured and unsubordinated indebtedness of TMCC from time to
time outstanding. The Indenture does not limit the aggregate principal amount of
Debt Securities which may be issued thereunder and Debt Securities may be issued
thereunder from time to time as a single series or in two or more separate
series up to the aggregate principal amount from time to time authorized by TMCC
for each series. Prior to the date of this Prospectus Supplement, TMCC has
issued approximately $2,909,480,000 aggregate principal amount of Notes under
the Indenture. TMCC may, from time to time, without the consent of the Holders
of the Notes, provide for the issuance of Notes or other Debt Securities under
the Indenture in addition to the $4,090,520,000 aggregate principal amount of
Notes offered hereby and the Notes previously issued.
The Notes are currently limited to $7,000,000,000 aggregate principal amount
(except that with respect to Notes sold at a discount, the initial offering
price will be used) of which approximately $2,909,480,000 aggregate principal
amount have previously been issued. The Notes will be offered on a continuing
basis and will mature on a day nine months or more from the date of issue, as
selected by the purchaser and agreed to by TMCC. Unless otherwise specified in
an applicable Pricing Supplement, interest-bearing Notes will either be Fixed
Rate Notes or Floating Rate Notes as specified in the applicable Pricing
Supplement. Notes may be issued at a premium, or at significant discounts from
their principal amount payable at Stated Maturity (or on any prior date on which
the principal or an installment of principal of a Note becomes due and payable,
whether by the declaration of acceleration, call for redemption at the option of
TMCC, repayment at the option of the Holder or otherwise) (each such date, a
"Maturity"), and some Notes may not bear interest.
Unless otherwise indicated in a Note or in a foreign currency supplement
hereto (a "Multi-Currency Supplement") or Indexed Note (as defined below)
supplement hereto (an "Indexed Note Supplement"), the Notes will be denominated
in United States dollars and payments of principal of, and premium, if any, and
interest on, the Notes will be made in United States dollars. If any of the
Notes are to be denominated other than in United States dollars or if the
principal of, and interest on, the Notes, and any premium provided for in any
Note is to be payable in or by reference to a currency (or in composite currency
units or in amounts determined by reference to one or more currencies) other
than that in which such Note is denominated, provisions with respect thereto
will be set forth in such Note and in the applicable Multi-Currency Supplement
or Indexed Note Supplement.
Interest rates, interest rate and/or principal formulae and other variable
terms of the Notes are subject to change by TMCC from time to time, but no such
change will affect any Note already issued or as to which an offer to purchase
has been accepted by TMCC.
Each Note will be issued in fully registered book-entry form (a "Book-Entry
Note") or definitive form (a "Definitive Note"), in denominations of $1,000 and
integral multiples thereof, unless otherwise specified in the applicable Pricing
Supplement. Book-Entry Notes may be transferred or exchanged only through a
participating member of The Depository Trust Company (or such other depositary
as is identified in an
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applicable Pricing Supplement) (the "Depositary"). See "Book-Entry Notes."
Registration of transfer of Definitive Notes will be made at the Corporate Trust
Office of the Trustee. No service charge will be made by TMCC, the Trustee or
the Security Registrar for any such registration of transfer or exchange of
Notes, but TMCC may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith (other than exchanges
pursuant to the Indenture, not involving any transfer).
Payments of principal of, and premium and interest, if any, on Book-Entry
Notes will be made by TMCC through the Trustee to the Depositary. See
"Book-Entry Notes." In the case of Definitive Notes, payment of principal or
premium, if any, at the Maturity of each Definitive Note will be made in
immediately available funds upon presentation of the Definitive Note at the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York, or at such other place as TMCC may designate. Payment of interest due
at Maturity will be made to the person to whom payment of the principal of the
Definitive Note shall be made. Payment of interest due on Definitive Notes other
than at Maturity will be made at the Corporate Trust Office of the Trustee or,
at the option of TMCC, may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
Notwithstanding the foregoing, a Holder of $10,000,000 or more in aggregate
principal amount of Definitive Notes having the same Interest Payment Dates
will, at the option of TMCC, be entitled to receive interest payments (other
than at Maturity) by wire transfer of immediately available funds if appropriate
wire transfer instructions have been received in writing by the Trustee not less
than 15 days prior to the applicable Interest Payment Date.
TRANSACTION AMOUNTS
Interest rates offered by TMCC with respect to the Notes may differ
depending upon the aggregate principal amount of Notes purchased in any single
transaction. TMCC expects generally to distinguish, with respect to such offered
rates, between purchases which are for less than, and purchases which are equal
to or greater than, $250,000. Such different rates may be offered concurrently
at any time. TMCC may also concurrently offer Notes having different variable
terms (as are described herein or in the applicable Pricing Supplement) to
different investors, and such different offers may depend upon whether an
offered purchase is for an aggregate principal amount of Notes at least equal to
or for an amount less than $250,000.
REDEMPTION
Unless otherwise specified in an applicable Pricing Supplement, the Notes
will not be subject to any sinking fund. If provided in an applicable Pricing
Supplement, Notes may be subject to redemption, in whole or in part, prior to
their Stated Maturity at the option of TMCC on notice given not more than 60 nor
less than 30 days prior to the date of redemption, or through operation of a
mandatory or optional sinking fund or analogous provisions. Such Pricing
Supplement will set forth the detailed terms of such redemption, including, but
not limited to, the date after or on which and the price or prices (including
premium, if any) at which such Notes may be redeemed.
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be subject to repayment at the option of the Holders.
INTEREST
GENERAL
Unless otherwise specified in an applicable Pricing Supplement, each Note
will bear interest from the date of issue at the rate per annum or, in the case
of a Floating Rate Note, pursuant to the interest rate formula stated therein
and in the applicable Pricing Supplement until the principal thereof is paid or
made available for payment. Unless otherwise specified in the applicable Pricing
Supplement, interest will be payable in arrears on each date specified in the
applicable Pricing Supplement on which an installment of interest is due and
payable (an "Interest Payment Date") and at Maturity. Unless otherwise specified
in an applicable Pricing Supplement, the first payment of interest on any Note
originally issued between a Regular Record Date and the related Interest Payment
Date will be made on the Interest Payment Date immediately following the next
succeeding Regular Record Date to the registered Holder on such next succeeding
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Regular Record Date. Unless otherwise specified in an applicable Pricing
Supplement, a "Regular Record Date" shall be the fifteenth day (whether or not a
Business Day) immediately preceding the related Interest Payment Date.
FIXED RATE NOTES
Unless otherwise specified in an applicable Pricing Supplement, each Fixed
Rate Note will bear interest from, and including, the date of issue, or the most
recent date to which interest has been paid or duly provided for, to, but
excluding, the Interest Payment Date or Maturity, as the case may be, at the
rate per annum stated on the face thereof until the principal amount thereof is
paid or made available for payment. Unless otherwise specified in an applicable
Pricing Supplement, interest on Fixed Rate Notes will be computed on the basis
of a 360-day year of twelve 30-day months.
Interest on Fixed Rate Notes will be payable semiannually on May 15 and
November 15 of each year, unless otherwise specified in an applicable Pricing
Supplement, and at Maturity. If any Interest Payment Date or the Maturity of a
Fixed Rate Note falls on a day that is not a Business Day, the related payment
of principal, premium, if any, or interest will be made on the next succeeding
Business Day as if made on the date such payment was due, and no interest will
accrue on the amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be.
FLOATING RATE NOTES
Unless otherwise specified in an applicable Pricing Supplement, Floating
Rate Notes will be issued as described below. Each applicable Pricing Supplement
will specify certain terms with respect to which such Floating Rate Note is
being delivered, including: whether such Floating Rate Note is a "Regular
Floating Rate Note" (as defined below), an "Inverse Floating Rate Note" (as
defined below) or a "Floating Rate/ Fixed Rate Note" (as defined below); the
Interest Rate Basis or Bases, Initial Interest Rate, Interest Reset Dates,
Interest Reset Period, Interest Payment Dates, Index Maturity, maximum interest
rate and minimum interest rate, if any, and the Spread and/or Spread Multiplier,
if any, and if one or more of the specified Interest Rate Bases is LIBOR, the
Index Currency and the Designated LIBOR Page, as described below.
The interest rate borne by the Floating Rate Notes will be determined as
follows:
(i) Unless such Floating Rate Note is designated as a "Floating
Rate/Fixed Rate Note," an "Inverse Floating Rate Note" or as having an
Addendum attached which specifies different or additional interest payment
terms, such Floating Rate Note will be designated a "Regular Floating Rate
Note" and, except as described below or in an applicable Pricing Supplement,
bear interest at the rate determined by reference to the applicable Interest
Rate Basis (i) plus or minus the applicable Spread, if any, and/or (ii)
multiplied by the applicable Spread Multiplier, if any. Commencing on the
Initial Interest Reset Date, the rate at which interest on such Regular
Floating Rate Note shall be payable shall be reset as of each Interest Reset
Date; provided, however, that the interest rate in effect for the period
from the Original Issue Date to the Initial Interest Reset Date will be the
Initial Interest Rate.
(ii) If such Floating Rate Note is designated as a "Floating Rate/Fixed
Rate Note," then, except as described below or in an applicable Pricing
Supplement, such Floating Rate Note will bear interest at the rate
determined by reference to the applicable Interest Rate Basis (i) plus or
minus the applicable Spread, if any, and/or (ii) multiplied by the
applicable Spread Multiplier, if any. Commencing on the Initial Interest
Reset Date, the rate at which interest on such Floating Rate/Fixed Rate Note
shall be payable shall be reset as of each Interest Reset Date; provided,
however, that (i) the interest rate in effect for the period from the
Original Issue Date to the Initial Interest Reset Date will be the Initial
Interest Rate; and (ii) unless otherwise specified in the applicable Pricing
Supplement, the interest rate in effect commencing on, and including, the
Fixed Rate Commencement Date to Maturity shall be the Fixed Interest Rate,
if such rate is specified in the applicable Pricing Supplement, or if no
such Fixed Interest Rate is so specified, the interest rate in effect
thereon on the day immediately preceding the Fixed Rate Commencement Date.
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(iii) If such Floating Rate Note is designated as an "Inverse Floating
Rate Note," then, except as described below or in an applicable Pricing
Supplement, such Floating Rate Note will bear interest equal to the Fixed
Interest Rate specified in the related Pricing Supplement minus the rate
determined by reference to the Interest Rate Basis (i) plus or minus the
applicable Spread, if any, and/or (ii) multiplied by the applicable Spread
Multiplier, if any; provided, however, that the interest rate thereon will
not be less than zero. Commencing on the Initial Interest Reset Date, the
rate at which interest on such Inverse Floating Rate Note is payable shall
be reset as of each Interest Reset Date; provided, however, that the
interest rate in effect for the period from the Original Issue Date to the
Initial Interest Reset Date will be the Initial Interest Rate.
Notwithstanding the foregoing, if such Floating Rate Note is designated as
having an Addendum attached as specified on the face thereof which Addendum
specifies different or additional interest payment terms, such Floating Rate
Note shall bear interest in accordance with the terms described in such Addendum
and the applicable Pricing Supplement.
Unless otherwise provided in the applicable Pricing Supplement, each
Interest Rate Basis shall be the rate determined in accordance with the
applicable provisions below. Except as set forth above or in an applicable
Pricing Supplement, the interest rate in effect on each day shall be (a) if such
day is an Interest Reset Date, the interest rate determined on the Interest
Determination Date (as defined below) immediately preceding such Interest Reset
Date or (b) if such day is not an Interest Reset Date, the interest rate
determined on the Interest Determination Date immediately preceding the next
preceding Interest Reset Date.
Interest on Floating Rate Notes will be determined by reference to an
"Interest Rate Basis," which may be one or more of (i) the "CD Rate," (ii) the
"CMT Rate," (iii) the "Commercial Paper Rate," (iv) the "Eleventh District Cost
of Funds Rate," (v) the "Federal Funds Rate," (vi) the "J.J. Kenny Rate," (vii)
"LIBOR," (viii) the "Prime Rate," (ix) the "Treasury Rate," or (x) such other
Interest Rate Basis or interest rate formula as may be set forth in the
applicable Pricing Supplement; provided, however, that with respect to a
Floating Rate/Fixed Rate Note, the interest rate commencing on the Fixed Rate
Commencement Date and continuing, unless otherwise specified in the applicable
Pricing Supplement, until Maturity shall be the Fixed Interest Rate, if such
rate is specified in the applicable Pricing Supplement, or if no such Fixed
Interest Rate is so specified, the interest rate in effect thereon on the day
immediately preceding the Fixed Rate Commencement Date. In addition, a Floating
Rate Note may bear interest in respect of the lowest of two or more Interest
Rate Bases.
The "Spread" is the number of basis points to be added to or subtracted from
the related Interest Rate Basis or Bases applicable to such Floating Rate Note.
The "Spread Multiplier" is the percentage of the related Interest Rate Basis or
Bases applicable to such Floating Rate Note by which such Interest Rate Basis or
Bases will be multiplied to determine the applicable interest rate on such
Floating Rate Note. The "Index Maturity" is the period to maturity of the
instrument or obligation with respect to which the Interest Rate Basis or Bases
will be calculated. The Spread, Spread Multiplier, Index Maturity and other
variable terms of the Floating Rate Notes are subject to change by TMCC from
time to time, but no such change will affect any Floating Rate Note previously
issued or as to which an offer has been accepted by TMCC.
Each applicable Pricing Supplement will specify whether the rate of interest
on the related Floating Rate Note will be reset daily, weekly, monthly,
quarterly, semiannually, annually or such other specified period (each, an
"Interest Reset Period") and the dates on which such Interest Rate will be reset
(each, an "Interest Reset Date"). Unless otherwise specified in the applicable
Pricing Supplement, the Interest Reset Date will be, in the case of Floating
Rate Notes which reset: (i) daily, each Business Day; (ii) weekly, the Wednesday
of each week (with the exception of weekly reset Treasury Rate Notes which will
reset the Tuesday of each week, except as specified below); (iii) monthly, the
third Wednesday of each month (with the exception of Eleventh District Cost of
Funds Rate Notes, all of which reset monthly, which will reset on the first
calendar day of the month); (iv) quarterly, the third Wednesday of March, June,
September and December of each year; (v) semiannually, the third Wednesday of
the two months specified in the applicable Pricing Supplement; and (vi)
annually, the third Wednesday of the month specified in the applicable Pricing
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Supplement; provided however, that, with respect to Floating Rate/Fixed Rate
Notes, the fixed rate of interest in effect for the period from the Fixed Rate
Commencement Date until Maturity shall be the Fixed Interest Rate or the
interest rate in effect on the day immediately preceding the Fixed Rate
Commencement Date, as specified in the applicable Pricing Supplement. If any
Interest Reset Date for any Floating Rate Note would otherwise be a day that is
not a Business Day, such Interest Reset Date will be postponed to the next
succeeding day that is a Business Day, except that in the case of a Floating
Rate Note as to which LIBOR is an applicable Interest Rate Basis, if such
Business Day falls in the next succeeding calendar month, such Interest Reset
Date will be the immediately preceding Business Day. As used herein, "Business
Day" means, unless otherwise specified in the applicable Pricing Supplement, any
day other than a Saturday or Sunday or any other day on which banks in The City
of New York are generally authorized or obligated by law or executive order to
close and, with respect to Notes as to which LIBOR is an applicable Interest
Rate Basis, is also a London Business Day. As used herein, "London Business Day"
means any day (a) if the Index Currency (as defined below) is other than the
European Currency Unit ("ECU"), on which dealings in deposits in such Index
Currency are transacted in the London interbank market or (b) if the Index
Currency is the ECU, that is not designated as an ECU Non-Settlement Day by the
ECU Banking Association in Paris or otherwise generally regarded in the ECU
interbank market as a day on which payments on ECUs shall not be made.
A Floating Rate Note may also have either or both of the following: (i) a
maximum numerical limitation, or ceiling, on the rate at which interest may
accrue during any interest period and (ii) a minimum numerical limitation, or
floor, on the rate at which interest may accrue during any interest period. In
addition to any maximum interest rate that may be applicable to any Floating
Rate Note pursuant to the above provisions, the interest rate on Floating Rate
Notes will in no event be higher than the maximum rate permitted by New York
law, as the same may be modified by United States law of general application.
Each Floating Rate Note will bear interest from the date of issue at the
rates specified therein until the principal thereof is paid or otherwise made
available for payment. Except as provided below or in an applicable Pricing
Supplement, interest will be payable in the case of Floating Rate Notes which
reset: (i) daily, weekly or monthly, on the third Wednesday of each month or on
the third Wednesday of March, June, September and December of each year as
specified in the applicable Pricing Supplement; (ii) quarterly, on the third
Wednesday of March, June, September and December of each year; (iii)
semiannually, on the third Wednesday of the two months of each year specified in
the applicable Pricing Supplement; and (iv) annually, on the third Wednesday of
the month of each year specified in the applicable Pricing Supplement (each, an
"Interest Payment Date") and, in each case, at Maturity. If any Interest Payment
Date for any Floating Rate Note (other than an Interest Payment Date at
Maturity) would otherwise be a day that is not a Business Day, such Interest
Payment Date will be the next succeeding day that is a Business Day except that
in the case of a Floating Rate Note as to which LIBOR is an applicable Interest
Rate Basis, if such Business Day falls in the next succeeding calendar month,
such Interest Payment Date will be the immediately preceding Business Day. If
the Maturity of a Floating Rate Note falls on a day that is not a Business Day,
the payment of principal, premium, if any, and interest will be made on the next
succeeding Business Day, and no interest on such payment shall accrue for the
period from and after such Maturity.
All percentages resulting from any calculation on Floating Rate Notes will
be rounded 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 such calculation on Floating Rate Notes will be
rounded to the nearest cent (with one-half cent being rounded upward).
Unless otherwise specified in the applicable Pricing Supplement, interest
payments on Floating Rate Notes will equal the amount of interest accrued from
and including the next preceding Interest Payment Date in respect of which
interest has been paid (or from and including the date of issue, if no interest
has been paid with respect to such Floating Rate Notes), to but excluding the
related Interest Payment Date; provided, however, that the interest payments on
Floating Rate Notes made at Maturity will include interest accrued to but
excluding the date of Maturity.
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Except as otherwise specified in the applicable Pricing Supplement, each
Floating Rate Note will accrue interest on an "Actual/360" basis, an
"Actual/Actual" basis, or a "30/360" basis, in each case as specified in the
applicable Pricing Supplement. For Floating Rate Notes calculated on an
Actual/360 basis and Actual/ Actual basis, accrued interest for each Interest
Calculation Period will be calculated by multiplying (i) the face amount of such
Floating Rate Note, (ii) the applicable interest rate, and (iii) the actual
number of days in the related Interest Calculation Period, and dividing the
resulting product by 360 or 365, as applicable (or, with respect to an
Actual/Actual basis Floating Rate Note, if any portion of the related Interest
Calculation Period falls in a leap year, the product of (i) and (ii) above will
be multiplied by the sum of (X) the actual number of days in that portion of the
related Interest Calculation Period falling in a leap year divided by 366 and
(Y) the actual number of days in that portion of such Interest Calculation
Period falling in a non-leap year divided by 365). For Floating Rate Notes
calculated on a 30/360 basis, accrued interest for an Interest Calculation
Period will be computed on the basis of a 360-day year of twelve 30-day months,
irrespective of how many days are actually in such Interest Calculation Period.
Unless otherwise specified in the related Pricing Supplement, with respect to
any Floating Rate Note that accrues interest on a 30/360 basis, if any Interest
Payment Date or the date of Maturity falls on a day that is not a Business Day,
the related payment of principal or interest will be made on the next succeeding
Business Day as if made on the date such payment was due, and no interest will
accrue on the amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be. As used herein, "Interest
Calculation Period" means with respect to any period, the period from and
including the most recent Interest Reset Date (or from and including the
original issue date in the case of the first Interest Reset Date) to but
excluding the next succeeding Interest Reset Date for which accrued interest is
being calculated. Unless otherwise specified in an applicable Pricing
Supplement, interest with respect to Notes for which the interest rate is
calculated with reference to two or more Interest Rate Bases will be calculated
in the same manner as if only one of the applicable Interest Rate Bases applied.
The interest rate applicable to each Interest Reset Period commencing on the
Interest Reset Date with respect to such Interest Reset Period will be the rate
determined on the applicable "Interest Determination Date." Unless otherwise
specified in the applicable Pricing Supplement, the Interest Determination Date
with respect to the CD Rate, the CMT Rate, the Commercial Paper Rate, the
Federal Funds Rate, the J.J. Kenny Rate and the Prime Rate will be the second
Business Day preceding each Interest Reset Date for the related Note; the
Interest Determination Date with respect to the Eleventh District Cost of Funds
Rate will be the last working day of the month immediately preceding each
Interest Reset Date on which the Federal Home Loan Bank of San Francisco (the
"FHLB of San Francisco") publishes the Index (as defined below); the Interest
Determination Date with respect to LIBOR will be the second London Business Day
preceding each Interest Reset Date. With respect to the Treasury Rate, unless
otherwise specified in an applicable Pricing Supplement, the Interest
Determination Date will be the day in the week in which the related Interest
Reset Date falls on which day Treasury Bills (as defined below) are normally
auctioned (Treasury Bills are normally sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is normally held
on the following Tuesday, except that such auction may be held on the preceding
Friday); provided, however, that if an auction is held on the Friday of the week
preceding the related Interest Reset Date, the related Interest Determination
Date will be such preceding Friday; and provided, further, that if an auction
falls on any Interest Reset Date, then the related Interest Reset Date will
instead be the first Business Day following such auction. Unless otherwise
specified in the applicable Pricing Supplement, the Interest Determination Date
pertaining to a Floating Rate Note the interest rate of which is determined with
reference to two or more Interest Rate Bases will be the latest Business Day
which is at least two Business Days prior to such Interest Reset Date for such
Floating Rate Note on which each Interest Rate Basis is determinable. Each
Interest Rate Basis will be determined and compared on such date, and the
applicable interest rate will take effect on the related Interest Reset Date.
Unless otherwise provided in the applicable Pricing Supplement, Bankers
Trust Company will be the "Calculation Agent." Upon request of the Holder of any
Floating Rate Note, the Calculation Agent will provide the interest rate then in
effect and, if determined, the interest rate that will become effective as a
result of a determination made for the next Interest Reset Date with respect to
such Floating Rate Note. Unless otherwise specified in the applicable Pricing
Supplement, the "Calculation Date," if applicable,
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pertaining to any Interest Determination Date will be the earlier of (i) the
tenth calendar day after such Interest Determination Date, or, if such day is
not a Business Day, the next succeeding Business Day or (ii) the Business Day
preceding the applicable Interest Payment Date or Maturity, as the case may be.
CD RATE. CD Rate Notes will bear interest at the rates (calculated with
reference to the CD Rate and the Spread and/or Spread Multiplier, if any)
specified in such CD Rate Notes and in any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CD Rate"
means, with respect to any Interest Determination Date relating to a CD Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the CD Rate (a "CD Rate Interest Determination Date"), the rate on
such date for negotiable certificates of deposit having the Index Maturity
specified in the applicable Pricing Supplement as published in "Statistical
Release H.15(519), Selected Interest Rates" or any successor publication
("H.15(519)") under the heading "CDs (Secondary Market)," or, if not published
by 3:00 P.M., New York City time, on the related Calculation Date, the rate on
such CD Rate Interest Determination Date for negotiable certificates of deposit
of the Index Maturity specified in the applicable Pricing Supplement as
published by the Federal Reserve Bank of New York in its daily statistical
release "Composite 3:30 P.M. Quotations for U.S. Government Securities" or any
successor publication ("Composite Quotations") under the heading "Certificates
of Deposit." If such rate is not yet published in either H.15(519) or Composite
Quotations by 3:00 P.M., New York City time, on the related Calculation Date,
then the CD Rate on such CD Rate Interest Determination Date will be calculated
by the Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 A.M., New York City time, on such CD Rate Interest
Determination Date, of three leading nonbank dealers in negotiable United States
dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable certificates of deposit of major United States
money market banks for negotiable certificates of deposit with a remaining
maturity closest to the Index Maturity designated in the applicable Pricing
Supplement in an amount that is representative for a single transaction in that
market at that time; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as set forth above, the CD Rate with respect
to such CD Rate Interest Determination Date will be the CD Rate in effect on
such CD Rate Interest Determination Date.
CMT RATE NOTES. CMT Rate Notes will bear interest at the rates (calculated
with reference to the CMT Rate and the Spread and/or Spread Multiplier, if any)
specified in such CMT Rate Notes and any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "CMT Rate"
means, with respect to any Interest Determination Date relating to a CMT Rate
Note or any Floating Rate Note for which the interest rate is determined with
reference to the CMT Rate (a "CMT Rate Interest Determination Date"), the rate
displayed on the Designated CMT Telerate Page under the caption " . . . Treasury
Constant Maturities . . . Federal Reserve Board Release H.15 . . . Mondays
Approximately 3:45 P.M.," under the column for the Designated CMT Maturity Index
for (i) if the Designated CMT Telerate Page is 7055, the rate on such CMT Rate
Interest Determination Date and (ii) if the Designated CMT Telerate Page is
7052, the week, or the month, as applicable, ended immediately preceding the
week in which the related CMT Rate Interest Determination Date occurs. If such
rate is no longer displayed on the relevant page, or if not displayed by 3:00
P.M., New York City time, on the related Calculation Date, then the CMT Rate for
such CMT Rate Interest Determination Date will be such Treasury Constant
Maturity rate for the Designated CMT Maturity Index as published in the relevant
H.15(519). If such rate is no longer published, or if not published by 3:00
P.M., New York City time, on the related Calculation Date, then the CMT Rate for
such CMT Rate Interest Detemination Date will be such Treasury Constant Maturity
rate for the Designated CMT Maturity Index (or other United States Treasury rate
for the Designated CMT Maturity Index) for the CMT Rate Interest Determination
Date with respect to such Interest Reset Date as may then be published by either
the Board of Governors of the Federal Reserve System or the United States
Department of the Treasury that the Calculation Agent determines to be
comparable to the rate formerly displayed on the Designated CMT Telerate Page
and published in the relevant H.15(519). If such information is not provided by
3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for the CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity, based on the arithmetic
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mean of the secondary market closing offer side prices as of approximately 3:30
P.M. (New York City time) on the CMT Rate Interest Determination Date reported,
according to their written records, by three leading primary United States
government securities dealers (each, a "Reference Dealer") in The City of New
York selected by the Calculation Agent (from five such Reference Dealers
selected by the Calculation Agent and eliminating the highest quotation (or, in
the event of equality, one of the highest) and the lowest quotation (or, in the
event of equality, one of the lowest)), for the most recently issued direct
noncallable fixed rate obligations of the United States ("Treasury Note") with
an original maturity of approximately the Designated CMT Maturity Index and a
remaining term to maturity of not less than such Designated CMT Maturity Index
minus one year. If the Calculation Agent cannot obtain three such Treasury Note
quotations, the CMT Rate for such CMT Rate Interest Determination Date will be
calculated by the Calculation Agent and will be a yield to maturity based on the
arithmetic mean of the secondary market offer side prices as of approximately
3:30 P.M. (New York City time) on the CMT Rate Interest Determination Date of
three Reference Dealers in The City of New York (from five such Reference
Dealers selected by the Calculation Agent and eliminating the highest quotation
(or, in the event of equality, one of the highest) and the lowest quotation (or,
in the event of equality, one of the lowest)), for Treasury Notes with an
original maturity of the number of years that is the next highest to the
Designated CMT Maturity Index and a remaining term to maturity closest to the
Designated CMT Maturity Index and in an amount of at least $100 million. If
three or four (and not five) of such Reference Dealers are quoting as described
above, then the CMT Rate will be based on the arithmetic mean of the offer
prices obtained and neither the highest nor lowest of such quotes will be
eliminated; provided however, that if fewer than three Reference Dealers
selected by the Calculation Agent are quoting as described herein, the CMT Rate
will be the CMT Rate in effect on such CMT Rate Interest Determination Date. If
two Treasury Notes with an original maturity as described in the third preceding
sentence, have remaining terms to maturity equally close to the Designated CMT
Maturity Index, the quotes for the CMT Rate Note with the shorter remaining term
to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Telerate
Service on the page designated in the applicable Pricing Supplement (or any
other page as may replace such page on that service for the purpose of
displaying Treasury Constant Maturities as reported in H.15(519)), for the
purpose of displaying Treasury Constant Maturities as reported in H.15(519). If
no such page is specified in the applicable Pricing Supplement, the Designated
CMT Telerate Page shall be 7052, for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of the
U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years) specified
in the applicable Pricing Supplement with respect to which the CMT Rate will be
calculated. If no such maturity is specified in the applicable Pricing
Supplement, the Designated CMT Maturity Index shall 2 years.
COMMERCIAL PAPER RATE. Commercial Paper Rate Notes will bear interest at
the rates (calculated with reference to the Commercial Paper Rate and the Spread
and/or Spread Multiplier, if any) specified in such Commercial Paper Rate Notes
and in any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Commercial
Paper Rate" means, with respect to any Interest Determination Date relating to a
Commercial Paper Rate Note or any Floating Rate Note for which the interest rate
is determined with reference to the Commercial Paper Rate (a "Commercial Paper
Rate Interest Determination Date"), the Money Market Yield (as defined below) on
such date of the rate for commercial paper having the Index Maturity specified
in the applicable Pricing Supplement as published by the Board of Governors of
the Federal Reserve System in H.15(519) under the heading "Commercial Paper." In
the event that such rate is not published by 3:00 P.M., New York City time, on
the related Calculation Date, then the Commercial Paper Rate will be the Money
Market Yield on such Commercial Paper Rate Interest Determination Date of the
rate for commercial paper having the Index Maturity specified in the applicable
Pricing Supplement as published in Composite Quotations under the heading
"Commercial Paper" (with an Index Maturity of one month or three months being
deemed to be equivalent to an Index Maturity of 30 days or 90 days,
respectively). If by 3:00 P.M., New York City time, on the related Calculation
Date such rate is not yet published in either H.15(519) or Composite Quotations,
then the Commercial Paper Rate for such Commercial Paper Rate Interest
Determination Date will be calculated by the Calculation Agent and will be the
Money Market Yield of the arithmetic mean of the
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offered rates at approximately 11:00 A.M., New York City time, on such
Commercial Paper Rate Interest Determination Date of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent for
commercial paper having the Index Maturity designated in the applicable Pricing
Supplement placed for an industrial issuer whose bond rating is "AA", or the
equivalent, from a nationally recognized securities rating agency; provided,
however, that if the dealers so selected by the Calculation Agent are not
quoting as mentioned in this sentence, the Commercial Paper Rate determined on
such Commercial Paper Rate Interest Determination Date will be the rate in
effect on such Commercial Paper Rate Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage rounded
upwards to the nearest one hundred-thousandth of a percentage point) calculated
in accordance with the following formula:
<TABLE>
<S> <C> <C>
D X 360
Money Market Yield = ------------- X 100
360 - (D X M)
</TABLE>
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the interest period for which interest is being calculated.
ELEVENTH DISTRICT COST OF FUNDS RATE. Eleventh District Cost of Funds Rate
Notes will bear interest at the rates (calculated with reference to the Eleventh
District Cost of Funds Rate and the Spread and/or Spread Multiplier, if any)
specified in such Eleventh District Cost of Funds Rate Notes and in any
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Eleventh
District Cost of Funds Rate" means, with respect to any Interest Determination
Date relating to an Eleventh District Cost of Funds Rate Note or any Floating
Rate Note for which the interest rate is determined with reference to the
Eleventh District Cost of Funds Rate (an "Eleventh District Cost of Funds Rate
Interest Determination Date"), the rate equal to the monthly weighted average
cost of funds for the calendar month preceding such Eleventh District Cost of
Funds Rate Interest Determination Date as set forth under the caption "11th
District" on Telerate Page 7058 as of 11:00 A.M., San Francisco time, on such
Eleventh District Cost of Funds Rate Interest Determination Date. If such rate
does not appear on Telerate Page 7058 on any related Eleventh District Cost of
Funds Rate Interest Determination Date, the Eleventh District Cost of Funds Rate
for such Eleventh District Cost of Funds Rate Interest Determination Date shall
be the monthly weighted average cost of funds paid by member institutions of the
Eleventh Federal Home Loan Bank District that was most recently announced (the
"Index") by the FHLB of San Francisco as such cost of funds for the calendar
month preceding the date of such announcement. If the FHLB of San Francisco
fails to announce such rate for the calendar month next preceding such Eleventh
District Cost of Funds Rate Interest Determination Date, then the Eleventh
District Cost of Funds Rate for such Eleventh District Cost of Funds Rate
Interest Determination Date will be the Eleventh District Cost of Funds Rate in
effect on such Eleventh District Cost of Funds Rate Interest Determination Date.
"Telerate Page 7058" means the display on the Dow Jones Telerate Service on such
page (or such other page as may replace such page on that service for the
purpose of displaying the Eleventh District Cost of Funds Rate) for the purpose
of displaying the monthly average cost of funds paid by member institutions of
the Eleventh Federal Home Loan Bank District.
FEDERAL FUNDS RATE. Federal Funds Rate Notes will bear interest at the
rates (calculated with reference to the Federal Funds Rate and the Spread and/or
Spread Multiplier, if any) specified in such Federal Funds Rate Notes and in any
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Federal
Funds Rate" means, with respect to any Interest Determination Date relating to a
Federal Funds Rate Note or any Floating Rate Note for which the interest rate is
determined with reference to the Federal Funds Rate (a "Federal Funds Rate
Interest Determination Date"), the rate on such date for Federal Funds as
published in H.15(519) under the heading "Federal Funds (Effective)" or, if not
published by 3:00 P.M., New York City time, on the related Calculation Date, the
rate on such Federal Funds Rate Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If such
rate is not published in
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either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on
the related Calculation Date, the Federal Funds Rate for such Federal Funds Rate
Interest Determination Date will be calculated by the Calculation Agent and will
be the arithmetic mean of the rates for the last transaction in overnight United
States dollar federal funds arranged by three leading brokers of federal funds
transactions in The City of New York selected by the Calculation Agent prior to
9:00 A.M., New York City time on such Federal Funds Rate Interest Determination
Date; provided, however that if the brokers so selected by the Calculation Agent
are not quoting as mentioned in this sentence, the Federal Funds Rate with
respect to such Federal Funds Rate Interest Determination Date will be the
Federal Funds Rate in effect on such Federal Funds Rate Interest Determination
Date.
J.J. KENNY RATE NOTES. J.J. Kenny Rate Notes will bear interest at the
rates (calculated with reference to the J.J. Kenny Rate and the Spread and/or
Spread Multiplier, if any) specified in such J.J Kenny Rate Notes and any
applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "J.J. Kenny
Rate" means, with respect to any Interest Determination Date relating to a J.J.
Kenny Rate Note or any Floating Rate Note for which the interest rate is
determined with reference to the J.J. Kenny Rate (a "J.J. Kenny Rate Interest
Determination Date"), the rate in the high grade weekly index (the "Weekly
Index") on such date made available by Kenny Information Systems ("Kenny") to
the Calculation Agent. The Weekly Index is, and shall be, based upon 30-day
yield evaluations at par of bonds, the interest of which is exempt from federal
income taxation under the Internal Revenue Code of 1986, as amended (the
"Code"), of not less than five high grade component issuers selected by Kenny
which shall include, without limitation, issuers of general obligation bonds.
The specific issuers included among the component issuers may be changed from
time to time by Kenny in its discretion. The bonds on which the Weekly Index is
based shall not include any bonds on which the interest is subject to a minimum
tax or similar tax under the Code, unless all tax-exempt bonds are subject to
such tax. In the event Kenny ceases to make available such Weekly Index, a
successor indexing agent will be selected by the Calculation Agent, such index
to reflect the prevailing rate for bonds rated in the highest short-term rating
category by Moody's Investors Service, Inc. and Standard & Poor's Corporation in
respect of issuers most closely resembling the high grade component issuers
selected by Kenny for its Weekly Index, the interest on which is (A) variable on
a weekly basis, (B) exempt from federal income taxation under the Code, and (C)
not subject to a minimum tax or similar tax under the Code, unless all
tax-exempt bonds are subject to such tax. If such successor indexing agent is
not available, the rate for any J.J. Kenny Rate Interest Determination Date
shall be 67% of the rate determined as if the Treasury Rate option had been
originally selected.
LIBOR. LIBOR Notes will bear interest at the rates (calculated with
reference to LIBOR and the Spread and/or Spread Multiplier, if any) specified in
such LIBOR Notes and in any applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "LIBOR"
means the rate determined by the Calculation Agent in accordance with the
following provisions:
(i) With respect to an Interest Determination Date relating to a LIBOR
Note or any Floating Rate Note for which the interest rate is determined
with reference to LIBOR (a "LIBOR Interest Determination Date"), LIBOR will
be either: (a) if "LIBOR Reuters" is specified in the applicable Pricing
Supplement, the arithmetic mean of the offered rates (unless the specified
Designated LIBOR Page (as defined below) by its terms provides only for a
single rate, in which case such single rate shall be used) for deposits in
the Index Currency (as defined below) having the Index Maturity designated
in the applicable Pricing Supplement, commencing on the second London
Business Day immediately following that LIBOR Interest Determination Date,
that appear on the Designated LIBOR Page specified in the applicable Pricing
Supplement as of 11:00 A.M. London time, on that LIBOR Interest
Determination Date, if at least two such offered rates appear (unless, as
aforesaid, only a single rate is required) on such Designated LIBOR Page, or
(b) if "LIBOR Telerate" is specified in the applicable Pricing Supplement,
the rate for deposits in the Index Currency having the Index Maturity
designated in the applicable Pricing Supplement commencing on the second
London Business Day immediately following
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that LIBOR Interest Determination Date that appears on the Designated LIBOR
Page specified in the applicable Pricing Supplement as of 11:00 A.M. London
time, on that LIBOR Interest Determination Date. If fewer than two offered
rates appear, or no rate appears, as applicable, LIBOR in respect of the
related LIBOR Interest Determination Date will be determined as if the
parties had specified the rate described in clause (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be, on
the applicable Designated LIBOR Page as specified in clause (i) above, the
Calculation Agent will request the principal London offices of each of four
major reference banks in the London interbank market, as selected by the
Calculation Agent, to provide the Calculation Agent with its offered
quotation for deposits in the Index Currency for the period of the Index
Maturity designated in the applicable Pricing Supplement, commencing on the
second London Business Day immediately following such LIBOR Interest
Determination Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination
Date and in a principal amount that is representative for a single
transaction in such Index Currency in such market at such time. If at least
two such quotations are provided, LIBOR determined on such LIBOR Interest
Determination Date will be the arithmetic mean of such quotations. If fewer
than two quotations are provided, LIBOR determined on such LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted at
approximately 11:00 A.M., (or such other time specified in the applicable
Pricing Supplement), in the applicable Principal Financial Center (as
defined below), on such LIBOR Interest Determination Date by three major
banks in such Principal Financial Center selected by the Calculation Agent
for loans in the Index Currency to leading European banks, having the Index
Maturity designated in the applicable Pricing Supplement and in a principal
amount that is representative for a single transaction in such Index
Currency in such market at such time; provided, however, that if the banks
so selected by the Calculation Agent are not quoting as mentioned in this
sentence, LIBOR determined on such LIBOR Interest Determination Date will be
LIBOR in effect on such LIBOR Interest Determination Date.
"Index Currency" means the currency (including composite currencies)
specified in the applicable Pricing Supplement as the currency for which LIBOR
shall be calculated. If no such currency is specified in the applicable Pricing
Supplement, the Index Currency shall be U.S. dollars.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is designated in
the applicable Pricing Supplement, the display on the Reuters Monitor Money
Rates Service on the page designated in the applicable Pricing Supplement (or
such other page as may replace such designated page on that service for the
purpose of displaying London interbank offered rates of major banks) for the
related Index Currency for the purpose of displaying the London interbank rates
of major banks for the applicable Index Currency, or (b) if "LIBOR Telerate" is
designated in the applicable Pricing Supplement, the display on the Dow Jones
Telerate Service on the page designated in the applicable Pricing Supplement (or
such other page as may replace such designated page on that service or such
other service or services as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates for the
related Index Currency) for the purpose of displaying the London interbank rates
of major banks for the applicable Index Currency. If neither LIBOR Reuters nor
LIBOR Telerate is specified in the applicable Pricing Supplement, LIBOR for the
applicable Index Currency will be determined as if LIBOR Telerate (and, if the
U.S. dollar is the Index Currency, page 3750) had been specified.
"Principal Financial Center" will generally be the capital city of the
country of the specified Index Currency, except that with respect to U.S.
dollars, Deutsche marks, Italian lira, Swiss francs, Dutch guilders and ECUs,
the Principal Financial Center shall be The City of New York, Frankfurt, Milan,
Zurich, Amsterdam and Luxembourg, respectively.
PRIME RATE. Prime Rate Notes will bear interest at the rates (calculated
with reference to the Prime Rate and the Spread and/or Spread Multiplier, if
any) specified in such Prime Rate Notes and any applicable Pricing Supplement.
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Unless otherwise specified in the applicable Pricing Supplement, "Prime
Rate" means, with respect to any Interest Determination Date relating to a Prime
Rate Note or any Floating Rate Note for which the interest rate is determined
with reference to the Prime Rate (a "Prime Rate Interest Determination Date"),
the rate on such date as such rate is published in H.15(519) under the heading
"Bank Prime Loan." If such rate is not published prior to 3:00 P.M., New York
City time, on the related Calculation Date, then the Prime Rate shall be the
arithmetic mean of the rates of interest publicly announced by each bank that
appears on the Reuters Screen NYMF Page as such bank's prime rate or base
lending rate as in effect for that Prime Rate Interest Determination Date. If
fewer than four such rates but more than one such rate appear on the Reuters
Screen NYMF Page for such Prime Rate Interest Determination Date, the Prime Rate
shall be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by a 360-day year as of the close of
business on such Prime Rate Interest Determination Date by four major money
center banks in The City of New York selected by the Calculation Agent. If fewer
than two such rates appear on the Reuters Screen NYMF Page, the Prime Rate will
be determined by the Calculation Agent on the basis of the rates furnished in
The City of New York by three substitute banks or trust companies organized and
doing business under the laws of the United States, or any state thereof, having
total equity capital of at least $500 million and being subject to supervision
or examination by Federal or state authority, selected by the Calculation Agent
to provide such rate or rates; provided, however, that if the banks or trust
companies selected as aforesaid are not quoting as mentioned in this sentence,
the Prime Rate for such Prime Rate Interest Determination Date will be the Prime
Rate in effect on such Prime Rate Interest Determination Date.
"Reuters Screen NYMF Page" means the display designated as page "NYMF" on
the Reuters Monitor Money Rates Service (or such other page as may replace the
NYMF page on that service for the purpose of displaying prime rates or base
lending rates of major United States banks).
TREASURY RATE. Treasury Rate Notes will bear interest at the rates
(calculated with reference to the Treasury Rate and the Spread and/or Spread
Multiplier, if any) specified in such Treasury Rate Notes and in any applicable
Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, "Treasury
Rate" means, with respect to any Interest Determination Date relating to a
Treasury Rate Note or any Floating Rate Note for which the interest rate is
determined by reference to the Treasury Rate (a "Treasury Rate Interest
Determination Date"), the rate applicable to the most recent auction of direct
obligations of the United States ("Treasury Bills") having the Index Maturity
specified in the applicable Pricing Supplement, as such rate is published in
H.15(519) under the heading "U.S. Government Securities-Treasury Bills-auction
average (investment)" or, if not published by 3:00 P.M., New York City time, on
the related Calculation Date, the auction average rate (expressed as a bond
equivalent yield on the basis of a year of 365 or 366 days, as applicable, and
applied on a daily basis) as otherwise announced by the United States Department
of the Treasury. In the event that the results of the auction of Treasury Bills
having the Index Maturity designated in the applicable Pricing Supplement are
not reported as provided by 3:00 P.M., New York City time, on such Calculation
Date, or if no such auction is held in a particular week, then the Treasury Rate
will be the rate published in H.15(519) under the heading "U.S. Government
Securities-Treasury Bills-Secondary Market" (expressed as a bond equivalent
yield on the basis of a 365 or 366 day year, as applicable, on a daily basis),
or if not published by 3:00 P.M. New York City time on the related Calculation
Date, the Treasury Rate will be calculated by the Calculation Agent and will be
a yield to maturity (expressed as a bond equivalent yield on the basis of a year
of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of approximately 3:30
P.M., New York City time, on such Treasury Rate Interest Determination Date, of
three leading primary United States government securities dealers (which may
include one or more of the Agents) selected by the Calculation Agent, for the
issue of Treasury Bills with a remaining maturity closest to the Index Maturity
designated in the applicable Pricing Supplement; provided, however, that if the
dealers so selected by the Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate with respect to such Treasury Rate Interest
Determination Date will be the Treasury Rate in effect on such Treasury Rate
Interest Determination Date.
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OTHER PROVISIONS; ADDENDA
Any provisions with respect to Notes, including the determination of an
Interest Rate Basis, the specification of Interest Rate Basis, calculation of
the interest rate applicable to a Floating Rate Note, its Interest Payment Dates
or any other matter relating thereto may be modified by the terms as specified
under "Other Provisions" on the face thereof or in an Addendum relating thereto,
if so specified on the face thereof and in the applicable Pricing Supplement.
ORIGINAL ISSUE DISCOUNT NOTES
Notes may be issued at a price less than their redemption price at Maturity,
resulting in such Notes being treated as if they were issued with original issue
discount for federal income tax purposes ("Original Issue Discount Notes"). Such
Original Issue Discount Notes may currently pay no interest or interest at a
rate which at the time of issuance is below market rates. See "United States
Taxation." Certain additional considerations relating to any Original Issue
Discount Notes may be described in the Pricing Supplement relating thereto.
INDEXED NOTES
Notes also may be issued with the principal amount payable at Maturity,
premium, if any, and/or interest to be paid thereon to be determined with
reference to the price or prices of specified commodities or stocks, interest
rate indices, interest rate or exchange rate swap indices, the exchange rate of
one or more specified currencies (including a composite currency such as the
European Currency Unit) relative to an indexed currency, or such other price, or
exchange rate or other financial index or indices as may be specified in such
Note ("Indexed Notes"), as set forth in an Indexed Note Supplement. Holders of
such Notes may receive a principal amount at Maturity that is greater than or
less than the face amount of the Notes depending upon the relative value at
Maturity of the specified indexed item. Information as to the method for
determining the principal amount payable at Maturity, if any, and, where
applicable, certain historical information with respect to the specified indexed
item or items and special tax considerations associated with investment in
Indexed Notes, will be set forth in the applicable Indexed Note Supplement.
An investment in Notes indexed, as to principal, premium and/or interest, to
one or more values of currencies (including exchange rates and swap indices
between currencies), commodities, interest rate or other indices entails
significant risks that are not associated with similar investments in a
conventional fixed-rate debt security. If the interest rate of such a Note is so
indexed, it may result in an interest rate that is less than that payable on a
conventional fixed-rate debt security issued at the same time, including the
possibility that no interest will be paid, and, if the principal amount of such
a Note is so indexed, the principal amount payable at Maturity may be less than
the original purchase price of such Note if allowed pursuant to the terms of
such Note, including the possibility that no principal will be paid. The
secondary market for such Notes will be affected by a number of factors,
independent of the creditworthiness of TMCC and the value of the applicable
currency, commodity or interest rate index, including the volatility of the
applicable currency, commodity or interest rate index, the time remaining to the
maturity of such Notes, the amount outstanding of such Notes and market interest
rates. The value of the applicable currency, commodity or interest rate index
depends on a number of interrelated factors, including economic, financial and
political events, over which TMCC has no control. Additionally, if the formula
used to determine the principal amount, premium, if any, or interest payable
with respect to such Notes contains a multiple or leverage factor, the effect of
any change in the applicable currency, commodity or interest rate index may be
increased. The historical experience of the relevant currencies, commodities or
interest rate indices should not be taken as an indication of future performance
of such currencies, commodities or interest rate indices during the term of any
Note. 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 above, 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 such Notes and the suitability of such Notes in light of their particular
circumstances.
Notwithstanding anything to the contrary contained herein or in the
Prospectus, for purposes of determining the rights of a Holder of a Note indexed
as to principal in respect of voting for or against amendments to the Indenture
and modifications and the waiver of rights thereunder, the principal amount
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of such Indexed Note shall be deemed to be equal to the face amount thereof upon
issuance. The method for determining the amount of principal payable at Maturity
will be specified in the applicable Pricing Supplement.
BOOK-ENTRY NOTES
Upon issuance, all Book-Entry Notes having the same Original Issue Date,
Stated Maturity and otherwise having identical terms and provisions will be
represented by a single global security (each, a "Global Security"); provided,
however, that if by reason of the foregoing, a single Global Security would
exceed $150,000,000 in aggregate principal amount, one Global Security will be
issued to represent each $150,000,000 of aggregate principal amount and an
additional Global Security will be issued to represent any remaining principal
amount. Each Global Security representing Book-Entry Notes will be deposited
with, or on behalf of, the Depositary. Except as set forth below, a Global
Security may not be transferred except as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any nominee to a successor of
the Depositary or a nominee of such successor.
So long as the Depositary or its nominee is the registered owner of a Global
Security, the Depositary or its nominee, as the case may be, will be the sole
Holder of the Book-Entry Notes represented thereby for all purposes under the
Indenture. Except as otherwise provided in this section, the Beneficial Owners
of the Global Security or Securities representing Book-Entry Notes will not be
entitled to receive physical delivery of Certificated Notes and will not be
considered the Holders thereof for any purpose under the Indenture, and no
Global Security representing Book-Entry Notes shall be exchangeable or
transferrable. Accordingly, each person owning a beneficial interest in a Global
Security must rely on the procedures of the Depositary and, if such person is
not a participant, on the procedures of the participant through which such
person owns its interest in order to exercise any rights of a Holder under the
Indenture. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in certificated form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security representing Book-Entry Notes.
The initial Depositary for the Notes will be The Depository Trust Company.
The following is based on information furnished by the Depositary:
The Depositary will act as securities depository for the Book-Entry
Notes. The Book-Entry Notes will be issued as fully registered securities
registered in the name of Cede & Co. (the Depositary's partnership nominee).
The Depositary is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and
a "clearing agency" registered pursuant to the provisions of Section 17A of
the Securities Exchange Act of 1934, as amended. The Depositary holds
securities that its participants ("Participants") deposit with the
Depositary. The Depositary also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement
of securities certificates. Direct Participants include securities brokers
and dealers, banks, trust companies, clearing corporations and certain other
organizations. The Depositary is owned by a number of its Direct
Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc.
Access to the Depositary's system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through
or maintain a custodial relationship with a Direct Participant, either
directly or indirectly ("Indirect Participant"). The rules applicable to the
Depositary and its Participants are on file with the Securities and Exchange
Commission.
Purchases of Book-Entry Notes under the Depositary's system must be made
by or through Direct Participants, which will receive a credit for such
Book-Entry Notes on the Depositary's records. The
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ownership interest of each actual purchaser of each Book-Entry Note
represented by a Global Security ("Beneficial Owner") is in turn to be
recorded on the Direct and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from the Depositary of their purchase,
but Beneficial Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of
their holdings, from the Direct or Indirect Participants through which such
Beneficial Owner entered into the transaction. Transfers of ownership
interests in a Global Security representing Book-Entry Notes are to be
accomplished by entries made on the books of Participants acting on behalf
of Beneficial Owners. Beneficial Owners of a Global Security representing
Book-Entry Notes will not receive Definitive Notes representing their
ownership interests therein, except in the event that use of the book-entry
system for such Book-Entry Notes is discontinued.
To facilitate subsequent transfers, all Global Securities representing
Book-Entry Notes which are deposited with the Depositary are registered in
the name of the Depositary's nominee, Cede & Co. The deposit of Global
Securities with the Depositary and their registration in the name of Cede &
Co. effect no change in beneficial ownership. The Depositary has no
knowledge of the actual Beneficial Owners of the Global Securities
representing the Book-Entry Notes; the Depositary's records reflect only the
identity of the Direct Participants to whose accounts such Book-Entry Notes
are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings
on behalf of their customers and for forwarding all notices concerning the
Notes to their customers.
Conveyance of notices and other communications by the Depositary to
Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will by
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Book-Entry Notes within an issue are being redeemed, the Depositary's
practice is to determine by lot the amount of the interest of each Direct
Participant in such issue to be redeemed.
Neither the Depositary nor Cede & Co. will consent or vote with respect
to the Global Securities representing the Book-Entry Notes. Under its usual
procedures, the Depositary mails an Omnibus Proxy to TMCC as soon as
possible after the applicable record date. The Omnibus Proxy assigns Cede &
Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Book-Entry Notes are credited on the applicable record date
(identified in a listing attached to the Omnibus Proxy).
Principal, premium, if any, and interest payments on the Global
Securities representing the Book-Entry Notes will be made to the Depositary.
The Depositary's practice is to credit Direct Participants' accounts on the
applicable payment date in accordance with their respective holdings shown
on the Depositary's records unless the Depositary has reason to believe that
it will not receive payment on such date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers
in bearer form or registered in "street name", and will be the
responsibility of such Participant and not of the Depositary, the Trustee or
TMCC, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of principal, premium, if any, and
interest to the Depositary is the responsibility of TMCC or the Trustee,
disbursement of such payments to Direct Participants shall be the
responsibility of the Depositary, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and Indirect
Participants.
A Beneficial Owner shall give notice to elect to have its Book-Entry
Notes repaid by TMCC, through its Participant, to the Trustee, and shall
effect delivery of such Book-Entry Notes by causing the Direct Participant
to transfer the Participant's interest in the Global Security or Securities
representing such Book-Entry Notes, on the Depositary's records, to the
Trustee. The requirement for physical delivery of Book-Entry Notes in
connection with a demand for repayment will be deemed satisfied when the
ownership rights in the Global Security or Securities representing such
Book-Entry Notes are transferred by Direct Participants on the Depositary's
records.
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The Depositary may discontinue providing its services as securities
depository with respect to the Book-Entry Notes at any time by giving
reasonable notice to TMCC or the Trustee. Under such circumstances, in the
event that a successor securities depository is not obtained, Definitive
Notes are required to be printed and delivered.
TMCC may decide to discontinue use of a system of book-entry transfers
through the Depositary (or a successor securities depository). In that
event, Definitive Notes will be printed and delivered.
If the Depositary is at any time unwilling or unable to continue as
Depositary and a successor Depositary is not appointed by TMCC within 90 days,
TMCC will issue definitive Notes in exchange for the Notes represented by such
Global Security or Securities. In addition, TMCC may at any time and in its sole
discretion determine to discontinue use of the Global Security and, in such
event, will issue definitive Notes in exchange for the Notes represented by such
Global Security or Securities. Notes so issued will be issued in denominations
of $1,000 and integral multiples thereof and will be issued in registered form
only, without coupons.
UNITED STATES TAXATION
Set forth below is a summary of certain U.S. federal income tax
considerations of importance to Holders of the Notes. The summary concerns
Holders who hold the Notes as capital assets and not special classes of Holders,
such as dealers in securities or currencies, financial institutions, insurance
companies, regulated investment companies, persons who hold the Notes as a hedge
against currency risks or who hedge any currency risks of holding the Notes,
tax-exempt investors or U.S. Holders (as defined below) whose functional
currency is other than the U.S. dollar. The discussion below is based on
existing provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury regulations promulgated thereunder, judicial decisions and
administrative rulings, all of which are subject to change or alternative
construction with possible retroactive effect. On February 2, 1994, final
Treasury regulations under the original issue discount ("OID") provisions of the
Code (the "OID Regulations") were published in the Federal Register. Although
the OID Regulations, which replaced certain proposed OID regulations that were
issued on December 21, 1992, generally apply to debt instruments issued on or
after April 4, 1994, they provide that taxpayers may rely on them for debt
instruments issued after December 21, 1992. The following discussion is based on
the OID Regulations.
U.S. TAX CONSIDERATIONS FOR U.S. HOLDERS
GENERAL
As used herein, "U.S. Holder" means a Holder of a Note who is a citizen or
resident of the United States, a corporation or partnership (including an entity
treated as a corporation or partnership for U.S. tax purposes) or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, an estate or trust the income of which is subject to U.S.
federal income taxation regardless of its source, and any other Holder whose
ownership of a Note is effectively connected with the conduct of a trade or
business in the United States.
PAYMENTS OF INTEREST
Interest on the Notes generally will be taxable to a U.S. Holder as ordinary
interest income at the time it is accrued or received, depending in part on the
U.S. Holder's method of accounting for tax purposes.
ORIGINAL ISSUE DISCOUNT
GENERAL. Notes with a term greater than one year may be issued with OID for
U.S. federal income tax purposes. OID is the excess of the "stated redemption
price at maturity" of a Note over its "issue price." If this excess is less than
.25% of the Note's stated redemption price at maturity multiplied by the number
of complete years to its maturity (a "DE MINIMIS amount"), the amount of OID is
considered to be zero. The "stated redemption price at maturity" of a Note is
all amounts payable on the Note however designated other than payments of
"qualified stated interest." The "issue price" of an issue of Notes is defined
as the
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first price at which a substantial amount of such Notes has been sold, other
than to bond houses, brokers or similar persons or organizations acting as
underwriters, placement agents or wholesalers. "Qualified stated interest"
generally is stated interest that is unconditionally payable in cash or in
property (other than debt instruments of the issuer) at least annually at a
single fixed rate (a single fixed rate is a rate that appropriately takes into
account the length of time between payments). If a Note has certain interest
payment characteristics (E.G., teaser rates or interest holidays), then such
Note may also be treated as having OID for U.S. federal income tax purposes even
if such Note were issued at an issue price which does not otherwise result in
OID.
ACCRUAL OF OID. U.S. Holders are required to include OID in income before
the receipt of cash attributable to such income, regardless of such U.S.
Holders' method of accounting for tax purposes. The amount of OID includible in
income by the initial U.S. Holder of a Note is the sum of the daily portions of
OID with respect to such Note for each day during the taxable year or portion of
the taxable year in which such U.S. Holder held such Note. The amount of OID
which accrues in an accrual period is an amount equal to the excess (if any) of
(a) the product of the Note's "adjusted issue price" at the beginning of such
accrual period and its yield to maturity (determined on the basis of compounding
at the end of each accrual period and appropriately adjusted to take into
account the length of the particular accrual period) over (b) the sum of the
qualified stated interest payments, if any, allocable to the accrual period. The
daily portion of OID is determined by allocating to each day in any accrual
period a ratable portion of the amount of OID which accrues during the accrual
period. The "adjusted issue price" of a Note at the beginning of any accrual
period is the sum of the issue price of such Note plus the OID allocable to all
prior accrual periods reduced by payments on the Note other than qualified
stated interest. An "accrual period" may be of any length and the accrual
periods may vary in length over the term of the debt instrument, provided that
each accrual period is no longer than one year and each scheduled payment of
principal or interest occurs either on the first day or the last day of an
accrual period. Under these rules, U.S. Holders generally will have to include
in income increasingly greater amounts of OID in successive accrual periods.
FLOATING RATE NOTES. The Floating Rate Notes are treated as either
"variable rate debt instruments" or Contingent Notes (as defined below). The OID
Regulations provide special rules for determining the amount and accrual of
qualified stated interest and OID on a Floating Rate Note. Under the OID
Regulations, a Floating Rate Note will qualify as a variable rate debt
instrument if (a) its issue price does not exceed the total noncontingent
principal payments due under such Floating Rate Note by more than a specified DE
MINIMIS amount and (b) it provides for stated interest, paid or compounded at
least annually, at (where applicable) current values of (i) one or more
"qualified floating rates," (ii) a single fixed rate and one or more qualified
floating rates, (iii) a single "objective rate," or (iv) a single fixed rate and
a single objective rate that is a "qualified inverse floating rate," as such
terms are defined under the OID Regulations. The definitions of such terms and
their application, if any, to a particular Floating Rate Note will be described
in the related Pricing Supplement.
If a Floating Rate Note that qualifies as a variable rate debt instrument
provides for stated interest at either a single qualified floating rate or a
single objective rate that is unconditionally payable in cash or property (other
than debt instruments of the issuer) at least annually, then such stated
interest will constitute qualified stated interest, and will be taxable to the
U.S. Holder as ordinary interest income at the time it is accrued or received,
depending on such U.S. Holder's method of accounting for tax purposes. Such a
Floating Rate Note thus generally will not be treated as having OID unless its
stated principal amount exceeds its issue price and such excess is greater than
or equal to a specified DE MINIMIS amount. OID, if any, on such a Floating Rate
Note is allocated to an accrual period under the method described above.
Any other Floating Rate Note that qualifies as a variable rate debt
instrument generally will be converted into a fixed rate instrument, and the
amount and accrual of qualified stated interest and OID on such Floating Rate
Note are then determined by applying the general OID rules. The method for
converting such a Floating Rate Note to a fixed rate instrument will depend on
its characteristics. Such a Floating Rate Note providing for a qualified
floating rate or a qualified inverse floating rate is converted by substituting
a fixed rate (the "equivalent" fixed rate) equal to the value of the qualified
floating rate or qualified inverse floating rate as of such Floating Rate Note's
issue date. Such a Floating Rate Note providing for an objective rate (other
than a qualified inverse floating rate) is converted by substituting an
equivalent fixed rate that
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reflects the yield that is reasonably expected on such Floating Rate Note. In
the case of a Floating Rate Note that qualifies as a variable rate debt
instrument and provides for stated interest at one or more qualified floating
rates or a qualified inverse floating rate and additionally provides for stated
interest at a single fixed rate, the fixed rate is converted into a qualified
floating rate (or a qualified inverse floating rate if such Floating Rate Note
provides for a qualified inverse floating rate). The qualified floating rate or
qualified inverse floating rate that replaces the fixed rate must be such that
the fair market value of the Floating Rate Note as of the Floating Rate Note's
issue date is approximately the same as the fair market value of an otherwise
identical debt instrument that provides for either the qualified floating rate
or qualified inverse floating rate rather than the fixed rate. Such a Floating
Rate Note is then converted into an equivalent fixed rate debt instrument as
described above. In the event that the amount of qualified stated interest or
OID assumed to have accrued or been paid with respect to the equivalent fixed
rate debt instrument of a Floating Rate Note that qualifies as a variable rate
debt instrument differs from the amount of qualified stated interest or OID
actually accrued or paid on such Floating Rate Note during an accrual period,
the OID Regulations provide for appropriate adjustments to be made to the amount
of qualified stated interest or OID assumed to have accrued or been paid.
CONTINGENT NOTES
Notes may be issued under circumstances in which the amount and/or timing of
interest and principal on the Notes is subject to a contingency ("Contingent
Notes"). For example, TMCC may issue Notes under which the total noncontingent
payments are less than the issue price or Indexed Notes under which interest
and/or principal is determined by reference to multiple formulae based on the
values of specified stocks, commodities, foreign currencies or other such
personal property. If a Floating Rate Note does not qualify as a variable rate
debt instrument under the OID Regulations, then the Floating Rate Note would be
treated as a Contingent Note. It is not entirely clear under current law how a
Floating Rate Note would be taxed in such case. The proper U.S. federal income
tax treatment of a Contingent Note will be described in the related Pricing
Supplement.
SHORT-TERM NOTES
Notes that have a fixed maturity of one year or less ("Short-Term Notes")
will be treated as having been issued with acquisition discount. U.S. Holders
who report income for U.S. federal income tax purposes under the accrual method,
and certain other holders including banks and dealers in securities, are
required to accrue acquisition discount on Short-Term Notes on a straight-line
basis unless an election is made to accrue the acquisition discount under a
constant yield method (based on daily compounding). In general, an individual or
other cash method U.S. Holder is not required to accrue such acquisition
discount unless the U.S. Holder elects to do so. If such an election is not
made, any gain recognized by the U.S. Holder on the sale, exchange or maturity
of the Short-Term Note will be ordinary income to the extent of the acquisition
discount accrued on a straight-line basis, or upon election under the constant
yield method (based on daily compounding), through the date of sale or maturity,
and a portion of the deductions otherwise allowable to the U.S. Holder for
interest on borrowings allocable to the Short-Term Note will be deferred until a
corresponding amount of income is realized.
MARKET DISCOUNT AND PREMIUM
If a U.S. Holder acquires a Note at a price below its issue price (or, in
the case of a subsequent purchaser, its stated redemption price at maturity), or
acquires a Note issued with OID at a price below its adjusted issue price as of
the purchase date, the amount of the difference will be treated as "market
discount." If the market discount exceeds a DE MINIMIS amount, any gain on the
sale, exchange or retirement of the Note is treated as ordinary interest income
at the time of the disposition to the extent of the accrued market discount,
unless the U.S. Holder elects (the "current inclusion election") to accrue
market discount in income on a current basis. In addition, a U.S. Holder who
does not make the current inclusion election is required to defer deductions for
a portion of such Holder's interest expense on any indebtedness incurred to
purchase or carry such Note. Market discount is normally accrued on a
straight-line basis, but a Holder may elect to use a constant yield method of
accrual.
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A U.S. Holder who purchases a Note for an amount above its adjusted issue
price immediately after its purchase and less than or equal to its stated
redemption price at maturity will be considered to have purchased such Note at
an "acquisition premium." Under the acquisition premium rules, the amount of OID
which such U.S. Holder must include in its gross income with respect to such
Note for any taxable year (or portion thereof in which the U.S. Holder holds
such Note) will be reduced (but not below zero) by the portion of the
acquisition premium properly allocable to the period.
If a U.S. Holder purchases a Note for an amount above its stated redemption
price at maturity, such U.S. Holder will be considered to have purchased the
Note with "amortizable bond premium" equal in amount to such excess. A U.S.
Holder may elect to amortize such premium using a constant yield method over the
remaining term of the Note and may offset interest otherwise required to be
included in respect of the Note during any taxable year by the amortized amount
of such excess for the taxable year. However, if the Note may be optionally
redeemed after the U.S. Holder acquires it at a price in excess of its stated
redemption price at maturity, special rules would apply which could result in a
deferral of the amortization of some bond premium until later in the term of the
Note.
ELECTION TO TREAT ALL INTEREST AND PREMIUM AS OID
U.S. Holders who acquire Notes on or after April 4, 1994 may elect
irrevocably to include all interest (including stated interest, acquisition
discount, OID, DE MINIMIS OID, market discount, DE MINIMIS market discount, and
unstated interest, as adjusted by any amortizable bond premium or acquisition
premium on a debt instrument) in income by using the constant yield method
applicable to OID, subject to certain limitations and exceptions.
DISPOSITION OF A NOTE
U.S. Holders of Notes recognize gain or loss on the sale, redemption,
exchange or other disposition of such Notes. This gain or loss is measured by
the difference between the amount of cash received (except to the extent
attributable to accrued interest) and the U.S. Holder's adjusted tax basis in
the Note. A U.S. Holder's adjusted tax basis for determining gain or loss on a
sale or disposition of a Note generally will be such U.S. Holder's cost
increased by any amounts included in income, other than qualified stated
interest, and reduced by any amortized premium and cash received other than
qualified stated interest. Gain or loss on the sale, exchange or redemption of a
Note generally will be long-term capital gain or loss if the Note has been held
as a capital asset for more than one year, except to the extent that gain
represents accrued market discount or acquisition discount not previously
included in the U.S. Holder's income.
FOREIGN CURRENCY NOTES
Notes may be denominated in, or interest or principal on the Notes may be
determined by reference to, a foreign currency or foreign currency unit (E.G.,
the ECU) ("Foreign Currency Notes"). In this case, for U.S. federal income tax
purposes, U.S. Holders of Foreign Currency Notes may need to determine the U.S.
dollar equivalent of amounts includible in income and separately calculate any
foreign exchange gain or loss arising from holding a Foreign Currency Note.
TREATMENT OF INTEREST INCOME AND OID. With respect to interest income and
OID, a U.S. Holder of a Foreign Currency Note who is an accrual basis taxpayer
generally will be required to translate the interest income or OID for an
accrual period into U.S. dollars at the average exchange rate for such accrual
period. Alternatively, a U.S. Holder may elect to translate accrued interest
income or OID into U.S. dollars at the spot rate in effect on the last day of
such accrual period. If elected, this alternative method must be applied
consistently to all debt instruments held by such U.S. Holder from year to year.
A U.S. Holder of a Foreign Currency Note who is an accrual basis taxpayer
recognizes foreign exchange gain or loss on the receipt of a payment of accrued
interest income. Such exchange gain or loss generally will be measured by the
difference between (a) the U.S. dollar equivalent of the interest received
translated at the spot rate in effect on the date of payment, and (b) the U.S.
dollar equivalent of the accrued interest income translated at the average
exchange rates used to include such accrued interest in income. Cash basis
taxpayers generally will translate interest income and OID into U.S. dollars at
the spot exchange rate in
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effect on the date of payment. No foreign exchange gain or loss will be realized
with respect to the receipt of such interest income or OID (other than the gain
or loss which may be realized upon disposition of any foreign currency
received).
TREATMENT OF PRINCIPAL. With respect to payments of principal on a Foreign
Currency Note, a U.S. Holder (regardless of such U.S. Holder's method of
accounting) recognizes foreign exchange gain or loss measured by the difference
between (a) the U.S. dollar equivalent of the principal payment received
translated at the spot rate on the date of each payment, and (b) the U.S. dollar
equivalent of the principal amount paid translated at the spot rate in effect on
the date such U.S. Holder acquired the Note.
MARKET DISCOUNT. Market discount on a Foreign Currency Note is first
determined in the relevant foreign currency. Accrued market discount which,
under the rules discussed above, is taken into income upon the receipt of a
principal payment or upon the retirement or disposition of the Foreign Currency
Note, is translated into U.S. dollars on the disposition date and no part of
such accrued market discount is treated as exchange gain or loss. Where a U.S.
Holder makes an election to include accrued market discount on a current basis,
the market discount is translated into U.S. dollars on the basis of the average
exchange rate in effect during such accrual period, and the exchange gain or
loss is determined upon the receipt of any principal payment or upon the
disposition of the Foreign Currency Note in a manner similar to that described
above with respect to accrued interest.
ACQUISITION PREMIUM. Acquisition premium is computed in the relevant
foreign currency, and reduces OID accordingly. Exchange gain or loss is realized
with respect to such acquisition premium by treating the portion of premium
amortized with respect to any period as a return of principal. Accordingly,
exchange gain or loss will be computed by comparing the relevant exchange rate
at the date of purchase and the dates on which the acquisition premium reduces
OID.
TREATMENT OF FOREIGN EXCHANGE GAINS AND LOSSES. In general, foreign
exchange gain realized under the rules described above will be considered
ordinary income and includible in the taxable income of a U.S. Holder as
interest income. Foreign exchange loss realized under the rules described above
generally will be considered an ordinary loss deductible from taxable income as
interest expense to the extent provided for in the Code.
DISPOSITIONS OF FOREIGN CURRENCY. Foreign currency received by a U.S.
Holder with respect to a Foreign Currency Note will have a tax basis equal to
its U.S. dollar value at the time such foreign currency is received. Foreign
currency that is purchased generally will have a tax basis equal to its U.S.
dollar cost of acquisition. Any gain or loss recognized on a sale or disposition
of foreign currency will be ordinary income or loss.
DUAL AND MULTI-CURRENCY NOTES. Notes may be issued in circumstances where
interest payments on the Notes are denominated in or determined by reference to
one currency and the principal portion of the Notes may be denominated in or
determined by reference to another currency ("Dual Currency Notes"). In
addition, Notes may be issued in circumstances where interest or principal are
denominated in or determined by reference to more than one currency
("Multi-Currency Notes"). The federal income tax treatment of Dual and
Multi-Currency Notes will be described in an applicable Pricing Supplement.
U.S. TAX CONSIDERATIONS FOR FOREIGN PURCHASERS
Set forth below is a summary of certain U.S. federal income tax consequences
for U.S. Alien Holders of the Notes. For purposes of this discussion, "U.S.
Alien" means any person who, for U.S. federal income tax purposes, is a foreign
corporation, a nonresident alien individual, a nonresident alien fiduciary of a
foreign estate or trust, or a foreign partnership one or more of the members of
which is, for U.S. federal income tax purposes, a foreign corporation, a
nonresident alien individual, or a nonresident alien fiduciary of a foreign
estate or trust.
S-21
<PAGE>
Assuming certain certification requirements are satisfied (which generally
can be satisfied by providing Internal Revenue Service Form W-8, identifying the
beneficial owner of the instrument as a U.S. Alien and disclosing the U.S.
Alien's name and address), under current U.S. federal income and estate tax
laws:
(a) Payments of principal and interest (including OID) on a Note to a
Holder of a Note who is a U.S. Alien will not be subject to U.S. federal
income tax or withholding tax, provided that, in the case of interest and
OID, (i) the payments are not effectively connected with a U.S. trade or
business, (ii) the Holder does not actually or constructively own 10% or
more of the total combined voting power of all classes of stock of TMCC
entitled to vote, (iii) the Holder is not a controlled foreign corporation
related to TMCC through stock ownership, and (iv) the Holder is not a bank
receiving interest pursuant to a loan agreement entered into in the ordinary
course of its trade or business;
(b) A U.S. Alien Holder of a Note will not be subject to U.S. federal
income tax on gain realized on the sale, exchange or redemption of a Note if
such gain is not effectively connected with a U.S. trade or business and, in
the case of a U.S. Alien Holder who is an individual, such Holder is not
present in the United States for a total of 183 days or more during the
taxable year in which such gain is realized; and
(c) A Note held by an individual who at the time of death is not a
citizen or resident of the United States will not be subject to U.S. federal
estate tax as a result of such individual's death, unless the individual
actually or constructively owns 10% or more of the total combined voting
power of all classes of stock of TMCC entitled to vote or the interest
received on such Note is effectively connected with the conduct by such
Holder of a U.S. trade or business.
BACKUP WITHHOLDING
Under current U.S. federal income tax law, a 31% "backup" withholding tax is
applied to certain interest and principal payments made to, and to the proceeds
of sales before maturity by, certain U.S. persons if such persons fail to supply
taxpayer identification numbers and certain other information in the required
manner. Interest paid with respect to a Note and received by a U.S. Alien will
not be subject to backup withholding if the person required to withhold has
received appropriate certification statements. The applicable certification
procedures require that the Holder certify as to its status as a U.S. Alien and
provide its name and address.
PLAN OF DISTRIBUTION
The Notes are being offered on a continuing basis for sale by TMCC through
the Agents, who have agreed to use their reasonable efforts to solicit offers to
purchase the Notes and may also sell Notes to an Agent, as principal, for resale
to investors and other purchasers at varying prices related to prevailing market
prices at the time of resale, as determined by such Agent, or, if so agreed, at
a fixed initial offering price. TMCC also reserves the right to sell Notes
directly on its own behalf or through additional agents, acting either as agent
or principal, on substantially identical terms as those applicable to the
Agents. TMCC reserves the right to withdraw, cancel or modify the offer made
hereby without notice and may reject orders in whole or in part whether placed
directly with TMCC or through one of the Agents. The Agents will have the right,
in their discretion reasonably exercised, to reject in whole or in part any
offer to purchase Notes received by them. TMCC will pay the Agents, in the form
of a discount or otherwise, a commission, ranging from .125% to .750% (or, with
respect to Notes for which the Stated Maturity is in excess of 30 years, such
commission as shall be agreed upon by TMCC and the related Agent at the time of
sale), depending on the Stated Maturity of the Note, of the principal amount of
any Note sold through the Agents.
In addition, the Agents may offer the Notes they have purchased as principal
to other dealers for resale to investors and other purchasers, and may allow any
portion of the discount received in connection with such purchase from TMCC to
such dealers. Unless otherwise indicated in the applicable Pricing Supplement,
any Note sold to an Agent as principal will be purchased by such Agent at a
price equal to 100% of the principal amount thereof less a percentage equal to
the commission applicable to any agency sale of a Note of identical maturity,
and may be resold by the Agent to investors and other purchasers from time to
time in one or more transactions, including negotiated transactions, at a fixed
public offering price or at varying
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prices determined at the time of sale or may be resold to certain dealers as
described above. After the initial public offering of Notes to be resold to
investors and other purchasers on a fixed public offering price basis, the
public offering price, concession and discount may be changed.
Unless otherwise specified in an applicable Pricing Supplement, payment of
the purchase price of the Notes will be required to be made in immediately
available funds in New York City on the date of settlement.
Each Agent may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"). TMCC has agreed to
indemnify the Agents against certain liabilities, including liabilities under
the Securities Act, or to contribute to payments the Agents may be required to
make in respect thereof. TMCC has agreed to reimburse each of the Agents for
certain expenses. In the ordinary course of their respective businesses, certain
affiliates of J.P. Morgan Securities Inc., one of the Agents, have engaged and
may in the future engage in commercial banking transactions with TMCC and
affiliates of TMCC.
No Note will have an established trading market when issued. Unless
otherwise specified in the applicable Pricing Supplement, the Notes will not be
listed on any securities exchange. Each of the Agents may from time to time
purchase and sell Notes in the secondary market, but no Agent is obligated to do
so, and there can be no assurance that there will be a secondary market for the
Notes or liquidity in the secondary market if one develops. From time to time,
each of the Agents may make a market in the Notes but are not obligated to do
so, and any market making may be discontinued at any time.
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PROSPECTUS
[LOGO]
TOYOTA MOTOR CREDIT CORPORATION
DEBT SECURITIES
------------------
Toyota Motor Credit Corporation ("TMCC") may offer from time to time its
senior unsecured debt securities consisting of notes, debentures or other
evidences of indebtedness (the "Debt Securities"), in an aggregate principal
amount of not more than $4,790,520,000 (the initial offering price of Debt
Securities sold at a discount will be used for purposes of the limitation) or,
if applicable, the equivalent thereof in any other currency or currencies. The
Debt Securities may be offered as a single series or as two or more separate
series in amounts, at prices and on terms to be determined in light of market
conditions at the time of sale and to be set forth in a Prospectus Supplement or
Prospectus Supplements.
The terms of each series of Debt Securities, including, where applicable,
the specific designation, aggregate principal amount, authorized denominations,
maturity, rate or rates and time or times of payment of any interest, any terms
for optional or mandatory redemption or payment of additional amounts or any
sinking fund provisions, the initial public offering price, the proceeds to TMCC
and any other specific terms in connection with the offering and sale of such
series will be set forth in a Prospectus Supplement or Prospectus Supplements.
As used herein, Debt Securities shall include debt securities denominated in
United States dollars or, at the option of TMCC if so specified in an applicable
Prospectus Supplement, in any other currency or in composite currencies or in
amounts determined by reference to an index.
The Debt Securities may be sold directly by TMCC, through agents designated
from time to time or to or through underwriters or dealers. See "Plan of
Distribution." If any agents of TMCC or any underwriters are involved in the
sale of any Debt Securities in respect of which this Prospectus is being
delivered, the names of such agents or underwriters and any applicable
commissions or discounts will be set forth in the applicable Prospectus
Supplement. The net proceeds to TMCC from such sale also will be set forth in
the applicable Prospectus Supplement.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS MARCH 9, 1994.
<PAGE>
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE COMMISSIONER PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT HERETO.
AVAILABLE INFORMATION
TMCC is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports and other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information can be inspected and copied at
the Public Reference Room of the Commission, Room 1024, at 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the Commission's regional offices at 7
World Trade Center, New York, New York 10048 and Northwestern Atrium Center,
Suite 1400, 500 West Madison Street, Chicago, Illinois 60661-2511. Copies of
such material may also be obtained by mail from the Public Reference Section of
the Commission, at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 at
prescribed rates. Copies of such reports and other information may also be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005, on which an issue of TMCC's debt securities is listed.
TMCC has filed with the Commission a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities Act").
This Prospectus and the accompanying Prospectus Supplement do not contain all of
the information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement, which may
be examined without charge at the public reference facilities maintained by the
Commission at the Public Reference Room of the Commission, Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549. Copies thereof may be obtained from the
Commission upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
TMCC's Annual Report on Form 10-K for the fiscal year ended September 30,
1993 and its Quarterly Report on Form 10-Q for the quarter ended December 31,
1993 are incorporated in and made a part of this Prospectus. All documents filed
by TMCC with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of filing
such documents. A statement contained herein, in a Prospectus Supplement or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein, in a Prospectus Supplement or in any
subsequently filed document which is incorporated by reference herein modifies
or supersedes such statement. Any such statements so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus.
TMCC WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS PROSPECTUS IS
DELIVERED, ON THE REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE
DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN EXHIBITS TO SUCH
DOCUMENTS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO
THE DOCUMENTS THAT THIS PROSPECTUS INCORPORATES). REQUESTS FOR SUCH COPIES
SHOULD BE DIRECTED TO TOYOTA MOTOR CREDIT CORPORATION, 19001 SOUTH WESTERN
AVENUE, TORRANCE, CALIFORNIA 90509, ATTENTION: TREASURY, TELEPHONE NUMBER (310)
787-1310.
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<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
TMCC provides retail and wholesale financing, retail leasing and certain
other financial services to authorized Toyota and Lexus vehicle and Toyota
industrial equipment dealers and their customers in the United States (excluding
Hawaii). TMCC is a wholly owned subsidiary of Toyota Motor Sales, U. S. A., Inc.
("TMS"). TMS is primarily engaged in the wholesale distribution of automobiles,
light trucks, industrial equipment and related replacement parts and accessories
throughout the United States (excluding Hawaii). Substantially all of TMS's
products are either manufactured by its subsidiaries or are purchased from
Toyota Motor Corporation ("TMC"), the parent of TMS, or TMC's affiliates. TMCC
and its subsidiaries are collectively referred to as the "Company."
TMCC was incorporated in California on October 4, 1982, and commenced
operations in May 1983. TMCC's principal executive offices are located in the
TMS headquarters complex at 19001 South Western Avenue, Torrance, California
90509, and its telephone number is (310) 787-1310.
USE OF PROCEEDS
Unless otherwise specified in the Prospectus Supplement which accompanies
this Prospectus, the net proceeds from the sale of the Debt Securities will be
added to TMCC's general funds and will be available for the purchase of earning
assets and for the retirement of debt. Such proceeds initially may be used to
reduce short-term borrowings or may be invested in short-term securities.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities may be issued from time to time as a single series or in
two or more separate series. The following description of the terms of the Debt
Securities sets forth certain general terms and provisions of the Debt
Securities to which any Prospectus Supplement may relate. The particular terms
of the Debt Securities offered by any Prospectus Supplement (the "Offered Debt
Securities"), and the extent to which such general provisions may apply to the
Offered Debt Securities, will be described in a Prospectus Supplement relating
to such Offered Debt Securities.
The Debt Securities will be issued under an indenture, dated as of August 1,
1991, as amended and supplemented by a first supplemental indenture dated as of
October 1, 1991, as such indenture may be further amended from time to time (the
"Indenture"), between TMCC and the trustee with respect to one or more series of
Debt Securities designated in the applicable Prospectus Supplement or Prospectus
Supplements (the "Trustee"). The terms of the Debt Securities include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and holders
of the Debt Securities are referred to the Indenture and the Trust Indenture Act
for a statement thereof. The following summary of certain provisions of the Debt
Securities and of the Indenture does not purport to be complete and is qualified
in its entirety by reference to the Indenture, a copy of which has been filed as
an exhibit to the Registration Statement of which this Prospectus is a part.
Capitalized terms used but not defined herein have the meanings given to them in
the Indenture.
THE DEBT SECURITIES WILL BE OBLIGATIONS SOLELY OF TMCC AND WILL NOT BE
OBLIGATIONS OF, OR GUARANTEED BY, TMS OR TMC DIRECTLY OR INDIRECTLY.
GENERAL
The Indenture does not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and Debt Securities may be issued
thereunder from time to time as a single series or in two or more separate
series up to the aggregate principal amount from time to time authorized by TMCC
for each series. As of the date of this Prospectus, TMCC has authorized the
issuance under the Indenture of up to $8,300,000,000 aggregate principal amount
of debt securities (the initial offering price of Debt Securities sold at a
discount is used for purposes of this limitation) of which approximately
$3,509,480,000 aggregate principal amount have previously been issued.
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<PAGE>
The Debt Securities will be unsecured general obligations of TMCC and will
rank pari passu with all other unsecured and unsubordinated indebtedness of TMCC
from time to time outstanding.
The applicable Prospectus Supplement or Prospectus Supplements will describe
the terms of the Offered Debt Securities, including: (i) the aggregate principal
amount and denominations of such Debt Securities; (ii) the date on which such
Debt Securities will mature; (iii) the date or dates on which the principal of
such Debt Securities is payable, if other than on maturity, or the method of
determination thereof; (iv) the rate or rates per annum (which may be fixed or
variable), or the formula for determining such rate or rates, at which such Debt
Securities will bear interest, if any; (v) the dates on which such interest, if
any, will be payable; (vi) the Place of Payment or transfer with respect to such
Debt Securities; (vii) the provisions for redemption or repayment of such Debt
Securities, if any, including the redemption and/or repayment price or prices
and any remarketing arrangements relating thereto; (viii) the sinking fund
requirements or amortization provisions, if any, with respect to such Debt
Securities; (ix) whether such Debt Securities are denominated or provide for
payment in United States dollars or a foreign currency or units of two or more
currencies; (x) the form (registered or bearer or both) in which such Debt
Securities may be issued and any restrictions applicable to the exchange of one
form for another and to the offer, sale and delivery of Debt Securities in
either form; (xi) if TMCC will pay Additional Amounts in respect of Debt
Securities held by a person who is not a U.S. person in respect of specified
taxes, assessments or other governmental charges, under what circumstances TMCC
will pay such Additional Amounts and whether TMCC has the option to redeem the
affected Debt Securities rather than pay such Additional Amounts; (xii) whether
such Debt Securities will be issued in whole or in part in the form of one or
more global securities and, in such case, the Depositary for such global
securities; (xiii) the title of such Debt Securities, the series of which such
Debt Securities shall be a part and the Trustee with respect to such Debt
Securities; and (xiv) any other terms of such Debt Securities. Reference is made
to the Prospectus Supplement for the terms of the Debt Securities being offered
thereby. The variable terms of the Debt Securities are subject to change from
time to time, but no such change will affect any Debt Security already issued or
as to which an offer to purchase has been accepted by TMCC.
The provisions of the Indenture described above provide TMCC with the
ability, in addition to the ability to issue Debt Securities with terms
different from those of Debt Securities previously issued, to "reopen" a
previous issue or a series of Debt Securities and issue additional Debt
Securities of such issue or series.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and premium and interest, if any, on Debt Securities will be
made at the office of such Paying Agent or Paying Agents as TMCC may designate
from time to time, except that at the option of TMCC payment of any interest may
be made (i) by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register or (ii) by wire transfer to
an account maintained by the Person entitled thereto as specified in the
Security Register. Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Debt Securities will be
made to the Person in whose name such Debt Security is registered at the close
of business on the Regular Record Date for such interest.
Unless otherwise indicated in an applicable Prospectus Supplement, the
Trustee with respect to the Debt Securities of the related series, acting
through its Corporate Trust Office, will be designated as TMCC's sole Paying
Agent for payments with respect to Debt Securities of such series. TMCC may at
any time designate additional Paying Agents or rescind the designation of any
Paying Agent or approve a change in the office through which any Paying Agent
acts, except that TMCC will be required to maintain a Paying Agent in each Place
of Payment for such series. All moneys paid by TMCC to a Paying Agent for the
payment of principal of or premium or interest, if any, on any Debt
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<PAGE>
Security which remain unclaimed at the end of one year after such principal,
premium or interest shall have become due and payable will be repaid to TMCC,
and the Holder of such Debt Security or any coupon will thereafter look only to
TMCC for payment thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in global
form. A Debt Security in global form will be deposited with, or on behalf of, a
Depositary, which will be identified in an applicable Prospectus Supplement. A
global Debt Security may be issued in either registered or bearer form and in
either temporary or permanent form. A Debt Security in global form may not be
transferred except as a whole by the Depositary for such Debt Security to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such nominee
to a successor of such Depositary or a nominee of such successor. If any Debt
Securities of a series are issuable in global form, the applicable Prospectus
Supplement will describe the circumstances, if any, under which beneficial
owners of interests in any such global Debt Security may exchange such interests
for definitive Debt Securities of such series and of like tenor and principal
amount in any authorized form and denomination, the manner of payment of
principal of, premium and interest, if any, on any such global Debt Security and
the material terms of the depositary arrangement with respect to any such global
Debt Security.
CERTAIN COVENANTS
The Debt Securities will not be secured by mortgage, pledge or other lien.
TMCC has covenanted in the Indenture not to pledge or otherwise subject to any
lien any property or assets of TMCC unless the Debt Securities are secured by
such pledge or lien equally and ratably with all other obligations secured
thereby so long as such obligations shall be so secured; provided, however, that
such covenant does not apply to liens securing obligations which do not in the
aggregate at any one time outstanding exceed 5% of Consolidated Net Tangible
Assets (as defined below) of TMCC and its consolidated subsidiaries and also
does not apply to:
(a) the pledge of any assets of TMCC to secure any financing by TMCC of
the exporting of goods to or between, or the marketing thereof in, countries
other than the United States in connection with which TMCC reserves the
right, in accordance with customary and established banking practice, to
deposit, or otherwise subject to a lien, cash, securities or receivables for
the purpose of securing banking accommodations or as the basis for the
issuance of bankers' acceptances or in aid of other similar borrowing
arrangements;
(b) the pledge of receivables payable in currencies other than United
States dollars to secure borrowings in countries other than the United
States;
(c) any deposit of assets of TMCC with any surety company or clerk of
any court, or in escrow, as collateral in connection with, or in lieu of,
any bond on appeal by TMCC from any judgment or decree against it, or in
connection with other proceedings in actions at law or in equity by or
against TMCC or in favor of any governmental bodies to secure progress,
advance or other payments in the ordinary course of TMCC's business;
(d) any lien or charge on any property of TMCC, tangible or intangible,
real or personal, existing at the time of acquisition or construction of
such property (including acquisition through merger or consolidation) or
given to secure the payment of all or any part of the purchase or
construction price thereof or to secure any indebtedness incurred prior to,
at the time of, or within one year after, the acquisition or completion of
construction thereof for the purpose of financing all or any part of the
purchase or construction price thereof;
(e) any lien in favor of the United States of America or any state
thereof or the District of Columbia, or any agency, department or other
instrumentality thereof, to secure progress, advance or other payments
pursuant to any contract or provision of any statute;
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<PAGE>
(f) any lien securing the performance of any contract or undertaking not
directly or indirectly in connection with the borrowing of money, obtaining
of advances or credit or the securing of debt, if made and continuing in the
ordinary course of business;
(g) any lien to secure non-recourse obligations in connection with
TMCC's engaging in leveraged or single-investor lease transactions; and
(h) any extension, renewal or replacement (or successive extensions,
renewals or replacements), in whole or in part, of any lien, charge or
pledge referred to in clauses (a) through (g) above, provided, however, that
the amount of any and all obligations and indebtedness secured thereby will
not exceed the amount thereof so secured immediately prior to the time of
such extension, renewal or replacement, and that such extension, renewal or
replacement will be limited to all or a part of the property which secured
the charge or lien so extended, renewed or replaced (plus improvements on
such property).
"Consolidated Net Tangible Assets" means the aggregate amount of assets
(less applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles of TMCC and its consolidated subsidiaries, all as set forth on the
most recent balance sheet of TMCC and its consolidated subsidiaries prepared in
accordance with generally accepted accounting principles as practiced in the
United States.
SUCCESSOR CORPORATION
The Indenture provides that TMCC may consolidate with, or sell, lease or
convey all or substantially all of its assets to, or merge with or into, any
other corporation, provided, that in any such case: (i) either TMCC shall be the
continuing corporation, or the successor corporation shall be a corporation
organized and existing under the laws of the United States or any state thereof
and shall expressly assume, by a supplemental indenture, executed and delivered
to each Trustee, in form satisfactory to each Trustee, all of the obligations of
TMCC under the Debt Securities and the Indenture; and (ii) TMCC or such
successor corporation, as the case may be, shall not, immediately after such
merger or consolidation, or such sale, lease or conveyance, be in default in the
performance of any such obligation. Subject to certain limitations in the
Indenture, a Trustee may receive from TMCC an officer's certificate and an
opinion of counsel as conclusive evidence that any such consolidation, merger,
sale, lease or conveyance, and any such assumption, complies with the provisions
of the Indenture.
SUPPLEMENTAL INDENTURES
Supplemental indentures may be entered into by TMCC and the appropriate
Trustee with the consent of the Holders of 66 2/3% in principal amount of any
series of outstanding Debt Securities, for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of modifying in any manner the rights of the Holders of each such
series affected by such modification or amendment, provided that no supplemental
indenture may, among other things, reduce the principal amount of or interest on
any Debt Securities, change the maturity date of the principal, the interest
payment dates or other terms of payment or reduce the percentage in principal
amount of outstanding Debt Securities of any series the consent of whose Holders
is necessary to modify or alter the Indenture, without the consent of each
Holder of Debt Securities affected thereby. Under certain circumstances,
supplemental indentures may also be entered into without the consent of the
Holders.
EVENTS OF DEFAULT
The Indenture defines an Event of Default with respect to any series of Debt
Securities as being any one of the following events and such other events as may
be established for the Debt Securities of a particular series: (i) default in
payment of principal on the Debt Securities of such series; (ii) default in
payment of any interest on the Debt Securities of such series and continuance of
such default for a period of 30 days; (iii) default in the deposit of any
sinking fund payment with respect to Debt
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Securities of such series when and as due; (iv) default in the performance, or
breach, of any other covenant or warranty of TMCC in the Indenture (other than a
covenant or warranty included in the Indenture solely for the benefit of a
series of Debt Securities other than such series) continued for 60 days after
appropriate notice; and (v) certain events of bankruptcy, insolvency or
reorganization. No Event of Default with respect to a particular series of Debt
Securities issued under the Indenture necessarily constitutes an Event of
Default with respect to any other series of Debt Securities issued thereunder.
If an Event of Default occurs and is continuing, the appropriate Trustee or the
Holders of at least 25% in aggregate principal amount of Debt Securities of each
series affected thereby may declare the Debt Securities of such series to be due
and payable. Any past default with respect to a particular series of Debt
Securities may be waived by the Holders of a majority in aggregate principal
amount of the outstanding Debt Securities of such series, except in a case of
failure to pay principal of, or premium, if any, or interest on such Debt
Securities for which payment had not been subsequently made or a default in
respect of a covenant or provision of the Indenture which cannot be modified or
amended without the consent of the Holder of each outstanding Debt Security of
such series. TMCC will be required to file with each Trustee annually an
officer's certificate as to the absence of certain defaults. The appropriate
Trustee may withhold notice to Holders of any series of Debt Securities of any
default with respect to such series (except in payment of principal, premium, if
any, or interest) if it in good faith determines that it is in the interest of
such Holders to do so.
Subject to the provisions of the Indenture relating to the duties of a
Trustee in case an Event of Default shall occur and be continuing, a Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such Holders
have offered to such Trustee reasonable indemnity or security against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction. Subject to provisions in the Indenture for the
indemnification of a Trustee and to certain other limitations, the Holders of a
majority in principal amount of the outstanding Debt Securities of any series
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the appropriate Trustee, or exercising
any trust or power conferred on such Trustee with respect to the Debt Securities
of such series.
SATISFACTION AND DISCHARGE OF INDENTURE
The Indenture will be discharged with respect to the Debt Securities of any
series upon the satisfaction of certain conditions, including the payment in
full of the principal of, and premium, if any, and interest on all of the Debt
Securities of such series or the deposit with the appropriate Trustee of an
amount in cash or United States government obligations sufficient for such
payment or redemption, in accordance with the Indenture.
DEFEASANCE
TMCC may terminate certain of its obligations under the Indenture with
respect to the Debt Securities of any series, including its obligations to
comply with the restrictive covenants set forth in the Indenture (see "Certain
Covenants") with respect to the Debt Securities of such series, on the terms and
subject to the conditions contained in the Indenture, by depositing in trust
with the appropriate Trustee cash or United States government obligations
sufficient to pay the principal of, and premium, if any, and interest on the
Debt Securities of such series to their maturity in accordance with the terms of
the Indenture and the Debt Securities of such series. In such event, the
appropriate Trustee will receive an opinion of counsel stating that such deposit
and termination will not have any federal income tax consequences to the
Holders.
REGARDING THE TRUSTEES
The Indenture contains certain limitations on the right of a Trustee, should
it become a creditor of TMCC, to obtain payment of claims in certain cases, or
to realize on certain property received in respect of any such claim as security
or otherwise. A Trustee is permitted to engage in other transactions with TMCC;
provided, however, that if a Trustee acquires any conflicting interest it must
eliminate such conflict or resign.
7
<PAGE>
The Indenture provides that, in case an Event of Default has occurred and is
continuing, a Trustee is required to use the degree of care and skill of a
prudent person in the conduct of his or her own affairs in the exercise of its
powers.
GOVERNING LAW
The Indenture and the Debt Securities will be governed by and construed in
accordance with the laws of the State of New York.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth TMCC's ratio of earnings to fixed charges.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
------------------- ----------------------------------------------------
1993 1992 1993 1992 1991 1990 1989
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
RATIO OF EARNINGS TO FIXED
CHARGES(1)(2)..................... 1.68 1.50 1.56 1.39 1.34 1.27 1.25
<FN>
- ------------------------
(1) To maintain fixed charge coverage at the level specified in the Operating
Agreement, TMS from time to time has made noninterest-bearing advances and
income maintenance payments to TMCC. No such noninterest bearing advances
and income maintenance payments were made in fiscal years 1993, 1992 and
1991 or during the fiscal quarters ended December 31, 1993 and December 31,
1992. For financial statement presentation purposes, the imputed interest
on noninterest-bearing advances are included as charges to interest
expense. These charges and the income maintenance payments are offset in
the income statement as "Parent adjustment".
(2) The ratio of earnings to fixed charges was computed by dividing (i) the sum
of income before income taxes and fixed charges by (ii) fixed charges.
Fixed charges consist primarily of interest expense net of the effect of
noninterest-bearing advances. Had the amount shown in "Parent adjustment"
not been provided by TMS, the ratio of earnings to fixed charges for TMCC
would have been 1.56, 1.39, 1.34, 1.26, and 1.17 for the years ended
September 30, 1993, 1992, 1991, 1990 and 1989, respectively. The ratio of
earnings to fixed charges for TMS and subsidiaries was 2.07, 1.83, 2.54,
3.31 and 2.36 for the years ended September 30, 1993, 1992, 1991, 1990 and
1989, respectively. In March 1987, TMCC guaranteed payments of principal
and interest on $58 million principal amounts of bonds issued in connection
with the Kentucky manufacturing facility of an affiliate. As of December
31, 1993, TMCC has not incurred any fixed charges in connection with such
guarantee and no amount is included in any ratio of earnings to fixed
charges.
</TABLE>
PLAN OF DISTRIBUTION
TMCC may sell the Debt Securities through underwriters or agents or directly
to purchasers. A Prospectus Supplement will set forth the names of such
underwriters or agents, if any.
The Debt Securities may be sold to underwriters for their own account and
may be resold to the public from time to time in one or more transactions,
including negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale. A Prospectus Supplement will set
forth any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers.
The Debt Securities may be sold directly by TMCC, or through agents
designated by TMCC from time to time. A Prospectus Supplement will set forth any
commission payable by TMCC to such agent. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a reasonable efforts
basis for the period of its appointment.
8
<PAGE>
The net proceeds to TMCC from the sale of the Debt Securities will be the
purchase price of the Debt Securities less any such discounts or commissions and
the other attributable expenses of issuance and distribution.
TMCC will agree to indemnify underwriters and agents against certain civil
liabilities, including liabilities under the Securities Act, or contribute to
payments underwriters or agents may be required to make in respect thereof.
LEGAL MATTERS
The validity of the Debt Securities offered hereby will be passed upon for
TMCC by William A. Plourde, Jr., Esq., General Counsel of TMCC. Unless otherwise
specified in an applicable Prospectus Supplement, Brown & Wood will act as
counsel for the underwriters or agents, if any.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of TMCC for the year ended September
30, 1993, have been so incorporated in reliance on the report of Price
Waterhouse, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
9
<PAGE>
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS
PROSPECTUS SUPPLEMENT AND THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY TMCC OR
THE AGENTS. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE AFFAIRS OF TMCC SINCE THE
DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN
OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER IS NOT QUALIFIED TO
DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
PROSPECTUS SUPPLEMENT
Description of Notes........................... S-2
United States Taxation......................... S-17
Plan of Distribution........................... S-22
</TABLE>
PROSPECTUS
<TABLE>
<S> <C>
Available Information................. 2
Incorporation of Certain Documents By
Reference............................ 2
Toyota Motor Credit Corporation....... 3
Use of Proceeds....................... 3
Description of Debt Securities........ 3
Ratio of Earnings to Fixed Charges.... 8
Plan of Distribution.................. 8
Legal Matters......................... 9
Experts............................... 9
</TABLE>
$4,090,520,000
[LOGO]
TOYOTA MOTOR
CREDIT CORPORATION
Medium-Term Notes
----------------
PROSPECTUS SUPPLEMENT
-------------------
Merrill Lynch & Co.
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Lehman Brothers
March 9, 1994
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