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Pricing Supplement dated March 28, 1994
(To Prospectus dated March 9, 1994 and Rule 424 (b)(3)
Prospectus Supplement dated March 9, 1994 File No. 33-52359
TOYOTA MOTOR CREDIT CORPORATION
Medium-Term Note - Indexed
______________________________________________________________________________________
Face Amount: $12,000,000 Trade Date: March 28, 1994
Issue Price: 100% Original Issue Date: April 11, 1994
Interest Rate: 15.0% Net Proceeds to Issuer: $11,979,000
Interest Payment Dates: October 11, 1994, Agent's Discount or Commission:0.175%
April 11, 1995 and October 11, 1995
Stated Maturity Date: October 11, 1995
______________________________________________________________________________________
Calculation Agent: Merrill Lynch Capital Services, Inc.
Day Count Convention:
[x] 30/360 for the period from April 11, 1994 to October 11, 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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___________________________
Merrill Lynch & Co.
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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 (5.82% - Stripped Spread)] / 5.82%;
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 the Stripped Spread at any time on any Business Day
from April 11, 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 10% (such an event, an
"Automatic Locking Event"), the Indexed Principal Amount shall equal
zero.
For purposes of the Notes, the following terms shall have the
following meanings:
"Stripped Spread" means, with respect to a Determination Date, the
amount (expressed as a percentage) obtained by subtracting the
Treasury Offer Yield from the Stripped IRR.
"Treasury Offer Yield" means, with respect to a Determination Date,
the yield-to-maturity (expressed as a percentage) on the 7.125%
United States Treasury Bond due February 2023 (the "Treasury
Bond"), as displayed on Bloomberg Page <GOV> PX8 (as defined below)
as of approximately 11:00 a.m., New York City time, on the
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 the Determination Date. In such case, "Treasury
Offer Yield" will be the arithmetic mean (rounded to the second
decimal place, rounding up if the third decimal place, without
regard to rounding, if five or higher and otherwise truncating
after the second decimal place) 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.
"Stripped IRR" means, with respect to a Determination Date, the
internal rate of return, expressed as a percentage, calculated
using (a)(i) the Argentina Bond Bid Price minus (ii) the U.S.
Treasury Strip Offer Price as the initial cash outflow and (b) the
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scheduled interest payments on the Argentina Bond as the future
cash inflows.
"Argentina Bond Bid Price" means, with respect to a Determination
Date, the bid price quotation for the Republic of Argentina 4.25%
Fixed Rate Par Brady Bonds due 3/31/23 Series L (the "Argentina
Bond"), expressed in U.S. dollars. In determining the Argentina
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 Argentina
Bond as of 11:00 a.m., New York City time, on the Determination
Date. "Argentina Bond Bid Price" 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 quotation. In the event the Calculation Agent
is unable to obtain quotations from three Reference Dealers,
Argentina 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 a
Determination Date, the offer price quotation for the United States
Treasury Zero Coupon Bond due May 2021 (the "Treasury Strip"),
expressed in U.S. dollars, as displayed on Bloomberg Page <GOV>
PXS5 (as defined below), as of approximately 11:00 a.m., New York
City time, on the 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 the Determination Date. In such
case, "U.S. Treasury Strip Offer Price" 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 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 <GOV> PX8" means the display designated as <GOV>
PX8 on the Bloomberg Financial Markets Commodities News Service (or
such other page as may replace <GOV> PX8 on that service or such
other service as may be nominated as the information vendor for the
purpose of displaying quotations for the Treasury Strip).
"Bloomberg Page <GOV> PXS5" means the display designated as <GOV>
PXS5 on the Bloomberg Financial Markets Commodities News Service
(or such other page as may replace <GOV> PXS5 on that service or
such other service as may be nominated as the information vendor
for the purpose of displaying quotations for the Treasury Strip).
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"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 the Notes 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, except for purposes of determining whether an
Automatic Locking Event has occurred. For purposes of determining
whether an Automatic Locking Event has occurred, "Determination
Date" means the day on which the components of the Stripped Spread
will be measured.
"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.
Interest
If an Automatic Locking Event occurs, interest shall cease to
accrue on the date of the Automatic Locking Event. Prior to such date,
if any, interest will accrue from and including the last Interest
Payment Date to which interest has been paid (or from the Original
Issue Date if no interest has been paid) to but excluding such date of
the Automatic Locking Event.
Certain U.S. Tax Considerations
The following is a summary of the principal United States
federal income tax consequences of ownership of the Notes. The summary
concerns initial U.S. Holders (as defined in the Prospectus
Supplements) 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 United States dollar. The discussion below is based
upon the Internal Revenue Code of 1986, as amended, and final,
temporary and proposed United States Treasury Regulations. Persons
considering the purchase of the Notes should consult with and rely
solely upon their own tax advisors concerning the application of United
States 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
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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 15.00%
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, 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 should be
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a capital gain or loss, and would be long term if the U.S. Holder had
held the Note for more than one year.
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
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
capital loss in an amount equal to the excess of the Face Amount over
the Total Redemption Amount. Such capital loss should be long-term if
the U.S. Holder has held the Note for more than one year.
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 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 with respect to the timing and character of income and loss
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
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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.
