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Pricing Supplement dated March 1, 1994 Rule 424(b)(3)
(To Prospectus dated March 9, 1994 and File No. 33-52359
Prospectus Supplement dated March 9, 1994)
TOYOTA MOTOR CREDIT CORPORATION
Medium-Term Note - Fixed Rate - Indexed
______________________________________________________________________________________
Face Amount: $25,405,000 Trade Date: February 28, 1994
Issue Price: 100% Original Issue Date: March 14, 1994
Interest Rate: 5.50% Net Proceeds to Issuer: $25,366,892.50
Interest Payment Dates: September 14, 1994 Discount or Commission: .150%
and March 14, 1995
Stated Maturity Date: March 14, 1995
______________________________________________________________________________________
Calculation Agent: Merrill Lynch Capital Services, Inc.
Day Count Convention:
[x] 30/360 for the period from 3/14/94 to 3/14/95
[ ] Actual/Actual for the period from to
[ ] Other (see attached) to
Redemption:
[x] The Notes cannot be redeemed prior to the Stated Maturity Date.
[ ] The Notes may be redeemed prior to Stated Maturity Date.
Initial Redemption Date:
Initial Redemption Percentage: %
Annual Redemption Percentage Reduction: % until Redemption
Percentage is 100% of the Principal Amount.
Repayment:
[x] The Notes cannot be repaid prior to the Stated Maturity Date.
[ ] The Notes can be repaid prior to the Stated Maturity Date at the option of
the holder of the Notes.
Optional Repayment Date(s):
Repayment Price: %
Currency:
Specified Currency: U.S. dollars
(If other than U.S. dollars, see attached)
Minimum Denominations:
(Applicable only if Specified Currency is other than U.S. dollars)
Original Issue Discount: [ ] Yes [x] No
Total Amount of OID:
Yield to Maturity:
Initial Accrual Period:
Form: [x] Book-entry [ ] Certificated
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___________________________
Merrill Lynch & Co.
ADDITIONAL TERMS OF THE NOTES
Principal Payment at Maturity
Principal (the "Indexed Principal Amount") payable on
the Notes offered by this Pricing Supplement (the "Notes") will
be payable in U.S. dollars on the date of Maturity in an amount
determined in accordance with the following formula:
Face Amount + [Face Amount x (3.60% - Mexico Stripped Par
Spread)] / 3.60%;
provided however, that the payment in respect of the Indexed
Principal Amount shall in no event be less than zero, and
provided further, that in the event that (a) the Rate Lock Option
(as defined below) has not been exercised and (b) the Mexico
Stripped Par Spread at any time on any Business Day from March
14, 1994 to but not including the date that is two Business Days
prior to the date of Maturity, as determined in good faith by the
Calculation Agent, is greater than or equal to 6.50% (such an
event, an "Automatic Locking Event"), the Indexed Principal
Amount shall equal zero.
If an Automatic Locking Event, if any, has not occurred
prior to the Effective Date specified in the holders' notice
described in the next paragraph, the holders of the Notes may
exercise an option (the "Rate Lock Option") to lock in the Mexico
Stripped Par Spread component of the above formula. Once the
Rate Lock Option has been exercised, such election is binding and
irrevocable on the holders and TMCC.
The Rate Lock Option may only be exercised through
written notice, delivered to the Calculation Agent, signed by or
on behalf of all the holders of the Notes. The notice to
exercise the Rate Lock Option must be delivered to the
Calculation Agent on a New York Business Day that is subsequent
to May 14, 1994 but is at least two Business Days prior to the
Stated Maturity Date (such delivery date being the "Notice
Date"). The notice must indicate the date on which the Rate Lock
Option is to become effective (the "Effective Date"). The
Effective Date must be a New York Business Day, must be at least
two Business Days after the Notice Date and must be no later than
the Stated Maturity Date.
For purposes of the Notes, the following terms shall
have the following meanings:
"Mexico Stripped Par Spread" means, with respect to any
Determination Date, the amount (expressed as a percentage)
obtained by subtracting the Treasury Offer Yield from the
Mexico Stripped IRR.
"Treasury Offer Yield" means, with respect to any
Determination Date, the yield-to-maturity (expressed as a
percentage) on the 6.25% United States Treasury Bond due
February 2003 (the "Treasury Bond"), as displayed on
Bloomberg Page <GOV> PX7 (as defined below) as of
approximately 11:00 a.m., New York City time, on such
Determination Date. If such yield-to-maturity does not
appear, the Calculation Agent will request the principal New
York offices of three Reference Dealers to provide the
Calculation Agent with its yield-to-maturity on the Treasury
Bond, calculated on the basis of the offered price of the
Treasury Bond as of 11:00 a.m., New York City time, on such
Determination Date. In such case, "Treasury Offer Yield"
will be the arithmetic mean of each Reference Dealer's
quotation. In the event the Calculation Agent is unable to
obtain quotations from three Reference Dealers, Treasury
Offer Yield will be determined by the Calculation Agent by
such method as the Calculation Agent determines, in good
faith, in its sole discretion.
"Mexico Stripped IRR" means, with respect to any
Determination Date, the internal rate of return, expressed
as a percentage, calculated using (a)(i) the Mexican Bond
Bid Price minus (ii) the U.S. Treasury Strip Offer Price as
the initial cash outflow and (b) the scheduled interest
payments on the Mexican Bond as the future cash inflows.
"Mexican Bond Bid Price" means, with respect to any
Determination Date, the bid price quotation for the United
Mexican States 6.25% Series A or Series B Bond due
December 31, 2019 (as selected by the Calculation Agent)(the
"Mexican Bond"), expressed in U.S. dollars. In determining
the Mexican Bond Bid Price, the Calculation Agent will
request the principal New York offices of three Reference
Dealers to provide the Calculation Agent with its bid price
quotation on the Mexican Bond as of 11:00 a.m., New York
City time, on such Determination Date. "Mexican Bond Bid
Price" will be the arithmetic mean of each Reference
Dealer's quotation. In the event the Calculation Agent is
unable to obtain quotations from three Reference Dealers,
Mexican Bond Bid Price will be determined by the Calculation
Agent by such method as the Calculation Agent determines, in
good faith, in its sole discretion.
"U.S. Treasury Strip Offer Price" means, with respect to any
Determination Date, the offer price quotation for the United
States Treasury Zero Coupon Bond due August 2019 (the
"Treasury Strip"), expressed in U.S. dollars, as displayed
on Bloomberg Page <GOV> PXS4, as of approximately 11:00
a.m., New York City time, on such Determination Date. If
such offered price does not appear, the Calculation Agent
will request the principal New York offices of three
Reference Dealers to provide the Calculation Agent with its
offered price quotation on the Treasury Strip as of 11:00
a.m., New York City time, on such Determination Date. In
such case, "U.S. Treasury Strip Offer Price" will be the
arithmetic mean of each Reference Dealer's quotation. In
the event the Calculation Agent is unable to obtain
quotations from three Reference Dealers, U.S. Treasury Strip
Offer Price will be determined by the Calculation Agent by
such method as the Calculation Agent determines, in good
faith, in its sole discretion.
"Bloomberg Page" means the designated display page on the
Bloomberg Financial Markets Commodities News service (or
such other screen as may replace the designated page on that
service or such other service as may be nominated as the
information vendor for the purpose of displaying quotations
for the Treasury Offer Yield or the Treasury Strip, as
applicable).
"Calculation Agent" means Merrill Lynch Capital Services,
Inc. In the absence of manifest error, the determination by
the Calculation Agent of the Indexed Principal Amount
payable under this Note shall be final and binding on TMCC
and the holders of the Notes.
"Determination Date" means the second Business Day prior to
the date of Maturity or, in the event that the holders of
the Notes have elected to exercise the Rate Lock Option on a
New York Business Day that is earlier than such date of
Maturity, then the second Business Day prior to such New
York Business Day.
"New York Business Day" means any day, other than a Saturday
or Sunday, that is a day on which commercial banks are
generally open for business (including dealings in foreign
exchange and foreign currency) in New York, New York.
"Reference Dealer" means any major bank or banking or
investment banking corporation in New York City selected in
good faith by the Calculation Agent which will provide
quotations on the applicable prices, yields or rates.
Certain U.S. Tax Considerations
The following is a summary of the principal U.S.
federal income tax consequences of ownership of the Notes. The
summary concerns U.S. Holders (as defined in the Prospectus
Supplement) who hold the Notes as capital assets and does not
deal with special classes of holders such as dealers in
securities or currencies, persons who hold the Notes as a hedge
against currency risks or who hedge any currency risks of holding
the Notes, tax-exempt investors or U.S. Holders whose functional
currency is other than the U.S. dollar. The discussion below is
based upon the Internal Revenue Code of 1986, as amended, and
final, temporary and proposed U.S. Treasury Regulations. Persons
considering the purchase of the Notes should consult with and
rely solely upon their own tax advisors concerning the
application of U.S. federal income tax laws to their particular
situations as well as any consequences arising under the laws of
any other domestic or foreign taxing jurisdiction.
Except where otherwise indicated below, the summary
supplements and, to the extent inconsistent, replaces the
discussion under the caption "United States Taxation" in the
Prospectus Supplement.
General. There are no regulations, except the 1986
Proposed Regulations described below, published rulings or
judicial decisions involving the characterization, for United
States federal income tax purposes of securities with terms
substantially the same as the Notes. Although the matter is not
entirely free from doubt and the Notes may be subject to
different characterizations by the Internal Revenue Service (the
"IRS"), this discussion assumes that the Notes will be treated as
debt in their entirety. The Company intends to treat the Notes
as debt obligations of the Company for United States federal
income tax purposes and when required, intends to file
information returns with the IRS in accordance with such
treatment in the absence of any change or clarification in the
law, by regulation or otherwise, requiring a different
characterization. If the Notes are not in fact treated as debt
obligations of the Company for United States federal income tax
purposes, then the United States federal income tax treatment of
the purchase, ownership and disposition of the Notes could differ
from that discussed below.
U.S. Holders. Under general principles of current
United States federal income tax law, payments of interest on a
debt instrument generally will be taxable to a U.S. Holder as
ordinary interest income at the time such payments are accrued or
are received in accordance with the U.S. Holder's regular method
of tax accounting. Although the matter is not free from doubt,
under the foregoing principles, the amount payable with respect
to a Note at the 5.50% Interest Rate (the "Interest Payments")
should be includible in income by a U.S. Holder as ordinary
interest at the time the Interest Payments are accrued or are
received in accordance with such Holder's regular method of tax
accounting.
Under these principles, upon retirement of a Note, the
excess of the Indexed Principal Amount over the Face Amount, if
any, should be treated as contingent interest and generally
should be includible in income by a U.S. Holder as ordinary
interest on the date that the Indexed Principal Amount is accrued
(i.e., determined) or when such amount is received, in accordance
with the U.S. Holder's regular method of tax accounting.
However, if upon maturity the Indexed Principal Amount is equal
to or less than the Face Amount, then, under general principles
of current United States federal income tax law, a Note should be
treated as retired on the Stated Maturity Date for an amount
equal to the Indexed Principal Amount. A U.S. Holder generally
would recognize a capital loss under such circumstances in an
amount equal to the excess of the U.S. Holder's tax basis in the
Note (i.e., the Face Amount) over the Indexed Principal Amount.
Upon the sale or exchange of a Note prior to the date of
Maturity, a U.S. Holder should recognize taxable gain or loss
equal to the difference between the amount realized upon such
sale or exchange (other than amounts representing accrued and
unpaid interest) and the Face Amount (i.e., the U.S. Holder's tax
basis in the Note). Such gain or loss generally should be short-
term capital gain or loss.
In 1986, the Treasury Department issued proposed
regulations (the "1986 Proposed Regulations") under the original
issue discount provisions of the Code concerning contingent
payment debt obligations. If the 1986 Proposed Regulations are
ultimately adopted in their current form, such regulations would
apply to the Notes and if so applied, would cause the timing and
character of income, gain or loss recognized on a Note to differ
from the timing and character of income, gain or loss recognized
on a Note discussed above.
The 1986 Proposed Regulations set forth a special set
of rules applicable to debt instruments that fail to provide for
total noncontingent payments at least equal to their issue price.
Under these rules, where the total noncontingent payments on a
debt instrument are less than its issue price, the debt
instrument will be treated as having contingent interest and
principal and payments on the Notes will be taxed as described
below regardless of whether such payments are designated as
"principal" or "interest." Applying these rules, the Interest
Payments are treated as a return of principal. Then, if the sum
of the Interest Payments and the Indexed Principal Amount (the
"Total Redemption Amount") equals or exceeds the Face Amount, the
Notes would be treated as having been retired on the date of
Maturity for an amount equal to the Face Amount. The excess of
the Total Redemption Amount over the Face Amount (the "Excess
Amount"), if any, would be treated as ordinary interest and would
be includible in income by a U.S. Holder on the date on which the
Indexed Principal Amount is determined, regardless of the U.S.
Holder's regular method of tax accounting. Under these rules, if
the Total Redemption Amount is less than the Face Amount, then a
U.S. Holder should recognize a short-term capital loss in an
amount equal to the excess of the Face Amount over the Total
Redemption Amount.
Moreover, applying the 1986 Proposed Regulations, in
the event that the Rate Lock Option is exercised six months or
more prior to the Stated Maturity Date, an amount equal to the
excess of the Indexed Principal Amount over the present value
(determined by using a discount rate equal to the short-term
applicable federal rate in effect on the Original Issue Date) of
the Indexed Principal Amount (the "Discounted Indexed Principal
Amount") should be treated as original issue discount and a U.S.
Holder should be required to include such discount into income
under a constant yield method over the remaining term of the
Note. In addition, under such circumstances, if the sum of the
Interest Payments and the Discounted Indexed Principal Amount
exceeds the Face Amount, then such excess should be includible in
income by a U.S. Holder as ordinary interest on the date that the
Indexed Principal Amount became fixed (regardless of the U.S.
Holder's regular method of tax accounting) and the Note would be
treated as having been retired on the Stated Maturity Date for an
amount equal to the Face Amount. If, however, the sum of the
Interest Payments and the Discounted Indexed Principal Amount is
less than or equal to the Face Amount, the Note would be treated
as having been retired on the Stated Maturity Date for an amount
equal to the sum of the Interest Payments and the Discounted
Indexed Principal Amount.
There is no assurance that the 1986 Proposed
Regulations will be adopted or, if adopted, adopted in their
current form to apply to short term obligations such as the
Notes. On January 19, 1993, the Treasury Department issued
proposed regulations (the "1993 Proposed Regulations"),
concerning contingent payment debt obligations, which would have
replaced the 1986 Proposed Regulations and would have provided
for a set of rules with respect to the timing and character of
income and loss recognition on contingent payment debt
obligations that differ from the rules contained in the 1986
Proposed Regulations. The 1993 Proposed Regulations, which would
have applied to debt instruments issued 60 days or more after the
date the 1993 Proposed Regulations became final, generally
provided for several alternative timing methods which would have
required annual interest accruals to reflect either a market
yield for the debt instrument, determined as of the issue date,
or a reasonable estimate of the performance of contingencies.
The amount of interest deemed to accrue in a taxable year
pursuant to such methods would have been currently includible in
income by a U.S. Holder, with subsequent adjustments to the
extent that the estimate of income was incorrect. In addition,
under the 1993 Proposed Regulations, any gain realized on the
sale, exchange or retirement of a contingent payment debt
obligation generally would have been treated entirely as ordinary
interest income and any loss realized on the sale, exchange or
retirement of a contingent payment debt obligation generally
would have been treated entirely as a capital loss. However, on
January 22, 1993, the United States Government's Office of
Management and Budget announced that certain proposed regulations
which had not yet been published in the Federal Register,
including the 1993 Proposed Regulations, had been withdrawn.
Accordingly, it is unclear whether the 1993 Proposed Regulations
will be re-proposed or, if re-proposed, what effect, if any, such
regulations would have on the Notes. It should also be noted
that proposed Treasury regulations are not binding upon either
the IRS or taxpayers prior to becoming effective as temporary or
final regulations. Prospective investors in the Notes are urged
to consult their own advisors regarding the application of the
1986 Proposed Regulations, if any, and the effect of possible
changes to the 1986 Proposed Regulations.
