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Pricing Supplement dated January 13, 1994
(To Prospectus dated September 1, 1992 and Rule 424 (b)(3)
Prospectus Supplements dated September 1, 1992 File No. 33-50674
and January 3, 1994)
TOYOTA MOTOR CREDIT CORPORATION
Medium-Term Note - Indexed
________________________________________________________________________________
Face Amount: $16,000,000 Trade Date: January 13, 1994
Issue Price: 100% Original Issue Date: January 27, 1994
Interest Rate: 7.75% Net Proceeds to Issuer: $15,976,000
Interest Payment Dates: July 27, 1994 and Agent's Discount or Commission: 0.15%
January 27, 1995
Stated Maturity Date: January 27, 1995
_______________________________________________________________________________
Calculation Agent: Morgan Stanley & Co. Incorporated
Day Count Convention:
[x] 30/360 for the period from January 27, 1994 to January 27, 1995
[ ] 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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___________________________
Morgan Stanley & Co. Incorporated
ADDITIONAL TERMS OF THE NOTES
Principal Payment at Maturity
Principal payable on the Medium-Term Notes offered by
this Pricing Supplement (the "Indexed Principal Amount") will be
payable in U.S. dollars on the date of Maturity in an amount
equal to the lesser of: (i) 100% of the Face Amount of the
Notes, and (ii) the amount determined in accordance with the
following formula:
100% of Face Amount x [1 - (15 x [GBP Swap Rate - 5.52%])];
provided however, that in no event shall the Indexed Principal
amount be less than zero and provided, further, that in the event
that the GBP Swap Rate at any time on any Business Day from
January 13, 1994 up to but not including the date that is two
Business Days prior to the date of Maturity, as determined by the
Calculation Agent in good faith, in its sole discretion, is less
than or equal to 5.52%, the Indexed Principal Amount shall equal
100% of the Face Amount of the Notes.
On January 19, 1994, the GBP Swap Rate, as displayed on
Telerate Page 42279, was less than 5.52%. Accordingly, the
Indexed Principal Amount shall equal 100% of the Face Amount.
The Notes will be issued in minimum denominations of
$25,000 and integral multiples of $1,000 in excess thereof.
For purposes of these Notes, the following terms shall
have the following meanings:
"GBP Swap Rate" means the mid-market quotation for the
three-year Pound Sterling Swap Rate, expressed as a
percentage, as displayed on Telerate Page 42279 at
approximately 11:00 a.m. (London time) on the Determination
Date. If such offered rate does not appear on Telerate Page
42279 at such time on the Determination Date, "GBP Swap
Rate" will mean the mid-market quotation for the three-year
Pound Sterling Swap Rate, expressed as a percentage, as
displayed on Reuters Page ICAQ at approximately 11:00 a.m.
(London time) on the Determination Date. If such rate does
not appear on Reuters Page ICAQ at such time on the
Determination Date, the Calculation Agent will request the
principal London offices of each of the three Reference
Dealers (as defined below) to provide the Calculation Agent
with its mid-market quotation for the three-year Pound
Sterling Swap Rate at approximately 12:00 p.m. (London time)
on the Determination Date and in an amount that is
representative of a single transaction for such Reference
Dealer at such time. In such case, "GBP Swap Rate" will be
the arithmetic mean (rounded to the second decimal place,
rounding up if the third decimal place, without regard to
rounding, is five or higher and otherwise truncating after
the second decimal place) of each Reference Dealer's mid-
market quotation. In the event the Calculation Agent is
unable to obtain quotations from at least three Reference
Dealers, the GBP Swap Rate will be determined by the
Calculation Agent by such method as the Calculation Agent
determines, in good faith, in its sole discretion.
"Reuter's Page ICAQ" means the display designated as Page
ICAQ on the Reuters Monitor Money Rates Service (or such
other page as may replace Page ICAQ on that service or such
other service as may be nominated as the information vendor
for the purpose of displayed quotations for three-year Pound
Sterling Swap Rate).
"Telerate Page 42279" means the display designated as Page
42279 on the Dow Jones Telerate Service (or such other page
as may replace Page 42279 on that service or such other
service as may be nominated as the information vendor for
the purpose of displaying quotations for the three-year
Pound Sterling Swap Rate).
"Determination Date" means the date that is two Business
Days prior to the date of Maturity.
"Calculation Agent" means Morgan Stanley & Co. Incorporated.
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.
"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 and
London, England.
"Reference Dealers" means any major bank or banking
corporation in London, selected in good faith by the
Calculation Agent which will provide mid-market quotations
on the three-year Pound Sterling Swap Rate.
"Pound Sterling Swap Rate" means, in general, a mid-market
fixed-rate of interest that a hypothetical fixed-rate payor
would be prepared to pay under an interest-rate-swap or -
exchange agreement, and for which such payor would expect to
receive, in return, a floating rate of interest over a
period of three years equal to the then-prevailing six-month
Pound Sterling LIBOR rate determined on an Actual/365 day
basis.
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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 tax consequences to special classes of holders such as
dealers in securities or currencies, persons who hold the Notes
as a hedge against currency risks or who hedge any currency risks
of holding the Notes, tax-exempt investors, 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, this summary
supplements and, to the extent inconsistent, replaces the
discussion under the caption "United States Federal Taxation" in
the Prospectus Supplements.
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 7.75% 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 same principles, upon retirement of a Note,
if 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. 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 Notes were treated as
contingent payment debt obligations and if the 1986 Proposed
Regulations are ultimately adopted in their current form, such
regulations could apply to the Notes and 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 non-contingent 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, if the sum of
the Interest Payments and the Indexed Principal Amount (the
"Total Redemption Amount") equals or exceeds the Face Amount,
then 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
Determination Date, regardless of the U.S. Holder's regular
method of tax accounting. If, however, the Total Redemption
Amount is less than the Face Amount, then a U.S. Holder should
recognize a short-term capital loss under this set of rules in an
amount equal to the excess of the Face Amount over the Total
Redemption Amount.
There is no assurance that the 1986 Proposed
Regulations will be adopted or, if adopted, adopted in their
current form. 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 which would have
provided for a set of rules with respect to the timing of income
recognition on contingent payment debt obligations that differ
from the rules contained in the 1986 Proposed Regulations with
respect to the timing of income recognition. 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 tax
advisors regarding the application of the 1986 Proposed
Regulations, if any, and the effect of possible changes to the
1986 Proposed Regulations.
