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Pricing Supplement dated February 6, 1997 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 - Floating Rate
________________________________________________________________________________
Principal Amount: $100,000,000 Trade Date: February 6, 1997
Issue Price: 100% Original Issue Date: February 14, 1997
Initial Interest Rate: See "Additional Net Proceeds to Issuer: $99,825,000
Terms of the Notes" Principal's Discount
Interest Payment Period: Semiannual or Commission: 0.175%
Stated Maturity Date: February 15, 2002
________________________________________________________________________________
Calculation Agent: Morgan Guaranty Trust Company
Interest Calculation:
[ ] Regular Floating Rate Note [ ] Floating Rate/Fixed Rate Note
[ ] Inverse Floating Rate Note (Fixed Rate Commencement
(Fixed Interest Rate): Date):
[X] Other Floating Rate Note (Fixed Interest Rate):
(see attached)
Interest Rate Basis: [ ] CD Rate [ ] Commercial Paper Rate [ ] Prime Rate
[ ] Eleventh District Cost of Funds Rate [ ] Federal Funds Rate
[ ] LIBOR [ ] Treasury Rate [X] Other (see attached)
If LIBOR, Designated LIBOR Page: [ ] Reuters Page:
[ ] Telerate Page:
Initial Interest Reset Date: August 15, 1997 Spread (+/-): N/A
Interest Reset Period: Semiannual Spread Multiplier: N/A
Interest Reset Dates: August 15, Maximum Interest Rate: N/A
and February 15
Interest Payment Dates: August 15 Minimum Interest Rate: 0.0%.
and February 15, commencing Index Maturity: N/A
August 15, 1997 Index Currency: N/A
Day Count Convention:
[ ] 30/360 for the period from to
[ ] Actual/360 for the period from to
[X] Actual/Actual for the period from 2/14/97 to 2/15/02
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: N/A
Initial Redemption Percentage: N/A
Annual Redemption Percentage Reduction: N/A
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: %
Form: [x] Book-entry [ ] Certificated
(Continued on the following page)
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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:
</TABLE>
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An investment in the Notes to which this Pricing Supplement
relates presents certain risks that should be carefully
considered by investors.
See "Risk Factors"
----------------------------------------
J.P. Morgan Securities Inc.
<PAGE>
ADDITIONAL TERMS OF THE NOTES
As described below, the Consumer Price Index for all Urban
Consumers, as published by the Bureau of Labor Statistics of the
Department of Labor (the "BLS") will determine the amount of interest
payable on the Notes offered by this Pricing Supplement (the "Notes").
For further information on historical changes to the Consumer Price
Index, see "Risk Factors -- Consumer Price Index" and "Historical Data"
below. For information concerning certain of the risks attendant to a
purchase of the Notes, see "Risk Factors" below. For certain tax
consequences to holders of the Notes, see "Certain U.S. Tax
Considerations" below.
The Notes will be issued as a global security in denominations
of U.S. $10,000 and any integral multiple of U.S. $5,000 in excess
thereof.
Interest
The amount of interest payable on the Notes on each Interest
Payment Date will be linked to changes in the Consumer Price Index. The
Consumer Price Index for purposes of these Notes is the non-seasonally
adjusted U.S. City Average All Items Consumer Price Index for All Urban
Consumers ("CPI"), published monthly by the BLS. The CPI is a measure
of the average change in consumer prices over time in a fixed market
basket of goods and services, including food, clothing, shelter, fuels,
transportation, charges for doctors and dentists services, and
ethical drugs. In calculating the index, price changes for the various
items are averaged together with weights that represent their
importance in the spending of urban households in the United States.
The contents of the market basket of goods and services and the weights
assigned to the various items are updated periodically by the BLS to
take into account changes in consumer expenditure patterns.
The CPI is expressed in relative terms in relation to a time
base reference period for which the level is set at 100. For example,
if the CPI for the 1982-1984 reference period is 100, an increase of
16.5 percent from that period would be shown as 116.5. The CPI for a
particular month is released and published during the following month.
From time to time, the CPI is rebased to a more recent base reference
period. The base reference period for these Notes will be the 1982-1984
average equal to 100.0.
The "Reference CPI" for the first day of any calendar month is
the CPI for the third preceding calendar month as released and
published by the BLS in the second preceding calendar month. For
example, the Reference CPI applicable to April 1 in any year is the CPI
for January of such year, which is released and published in February.
The Reference CPI for any other day of a month is determined by a
linear interpolation between the Reference CPI applicable to the first
day of the month in which such day falls (in the example, January) and
the Reference CPI applicable to the first day of the month immediately
following (in the example, February). (In other words, the "Reference
CPI" for an Interest Payment Date on other than the first day of the
<PAGE>
month would be calculated by adding (i) the Reference CPI applicable to
the month in which such Interest Payment Date occurs (for this purpose,
the "Interest Payment Month") and (ii) the product of (A) the
difference between the Reference CPI applicable to the month
immediately following the Interest Payment Month and the Reference CPI
applicable to the Interest Payment Month and (B) the ratio of the
actual number of days in the calculation period (as defined in the next
sentence) to the actual number of days in the Interest Payment Month.)
The calculation period shall mean the period commencing with the first
day of the Interest Payment Month and ending with but not including the
Interest Reset Date (as defined below under "Determination of Semi-
Annual Coupon").
For purposes of calculating the interest due under the Notes,
if a previously reported CPI is revised by the BLS, the Calculation
Agent will continue to use the previously reported CPI. If the CPI is
rebased to a different year and 1982-84 CPI is no longer used, the base
reference period for the Notes will continue to be the 1982-84
reference period as long as that CPI continues to be published. If such
CPI is no longer published, and the discontinuation of publication
occurs before the maturity date of the U.S. Treasury's Treasury 10-Year
Inflation-Indexed Notes, Series A-2007, 3 3/8%, CUSIP Number 9128272M3
(the "Inflation-Linked Treasuries"), the base reference period will be
that used for the Inflation-Linked Treasuries. If the discontinuation
of publication occurs after the maturity date of the Inflation-Linked
Treasuries, the base reference period will be that used in any other
inflation-indexed notes that have been issued by the U.S. Treasury that
remain outstanding at that time or, if no such notes are outstanding,
will be determined in accordance with general market practice at the
time.
If the monthly CPI required for interest calculation is not
available by an Interest Determination Date, the Reference CPI for such
month shall be based on the previous twelve-month change in the CPI
available. For example, if the CPI for the month "M" is not available,
the formula for calculating the CPI to be used is:
Ref CPIM= CPIM-1 x [CPIM-1 / CPIM-13]1/12
This index number will be used for all subsequent calculations that
rely on that month s index number and will not be replaced by the
actual CPI when it is reported.
If, while the Notes are outstanding, the CPI is discontinued,
or substantially altered before the maturity date of the Inflation-
Linked Treasuries, the applicable substitute index for the Notes will
be that chosen by the Secretary of the Treasury for the Inflation-
Linked Treasuries as described in the 62 Federal Register 846-874
(January 6, 1997). If the CPI is discontinued after the maturity date
of the Inflation-Linked Treasuries, the substitute index will be that
used in any other inflation-indexed notes that have been issued by the
U.S. Treasury that remain outstanding at that time or if no such notes
are outstanding will be determined in accordance with general market
practice at the time.
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In calculating the interest due under the Notes, if any, the
Calculation Agent will first truncate to six decimal places and then
round to five decimal places, with the sixth decimal place rounded
upwards (e.g., 62.87759% (.6287759) would be truncated to 62.8775% (or
.628775) and then rounded to 62.878% (or .62878), and all dollar
amounts used in or resulting from any calculation in respect of the
Notes will be rounded to the nearest cent (with one-half cent being
rounded upward).
Determination of Semi-Annual Coupon
Interest payable on the Notes shall be determined on the
Interest Determination Date in respect of an Interest Payment Date and
will be payable in U.S. dollars on the related Interest Payment Date in
an amount determined in accordance with the following formula:
max [Principal x [(Spread x (Act. Days in Interest Calculation Period /
Actual Days in Year)) + ((Reference CPIn / Reference CPIn-1) - 1)], 0]
provided, however, that the rate of interest shall not be less than
0%. The rate of interest payable on the Notes on an Interest Payment
Date will exceed the Spread (3.20%) if the Reference CPI for that
Interest Payment Date has increased relative to the Reference CPI for
the immediately preceding Interest Payment Date. The rate of interest
payable on an Interest Payment Date will be less than 3.20% if the
Reference CPI for that Interest Payment Date decreased relative to the
Reference CPI for the immediately preceding Interest Payment Date, but
will not be less than 0%. If the Reference CPI for the relevant
Interest Payment Date has remained the same relative to the Reference
CPI for the immediately preceding Interest Payment Date, the Interest
Rate payable on the Notes for the related Interest Payment Date will
be 3.20%.
The rate of interest, if any, applicable to the Notes will
be adjusted in arrears on each Interest Reset Date, commencing August
15, 1997, and applied retroactively to all days in the immediately
preceding Interest Calculation Period (as defined below). For this
purpose, the number of days in an Interest Calculation Period will not
be changed whether or not any Interest Reset Date in respect of such
period is a New York Business Day.
For purposes of the Notes, the following terms shall have
the following meanings:
Reference CPIn-1 means the Reference CPI (as determined on
the Interest Determination Date as described above under
"Interest"), for the Interest Payment Date immediately
preceding the Interest Payment Date for which the
calculation is being made (or in the case of the Interest
<PAGE>
Payment Date in August 1997, the Reference CPI for February
14, 1997).
Reference CPIn means the Reference CPI (as determined on the
Interest Determination Date as described above under
"Interest") for the Interest Payment Date (or, in the case
of the Maturity of the Notes other than on the Stated
Maturity Date, such date of Maturity) in the month for which
the calculation is being made.
"Calculation Agent" means Morgan Guaranty Trust Company.
TMCC has appointed Morgan Guaranty Trust Company as
Calculation Agent for the purpose of making the
determination of the Reference CPI amounts and the interest
due under the Notes. If any then acting Calculation Agent is
unable to act as such, TMCC will appoint another agent to
act as Calculation Agent; provided that such replacement
Calculation Agent shall be a major U.S. money center bank
with its principal offices in New York City. All
determinations made by the Calculation Agent shall be at its
sole discretion and, in the absence of manifest error, shall
be conclusive for all purposes and binding on TMCC and the
holders of the Notes.
"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.
"Interest Determination Date" means with respect to each
Interest Payment Date, the date that is seven New York
Business Days immediately preceding such Interest Payment
Date.
"Interest Reset Date" means each February 15 and August 15,
whether or not a 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.
"Spread" means 3.20% (320 basis points).
RISK FACTORS
General
The Notes are speculative in nature and involve a high
degree of risk. An investment in Notes indexed to the CPI entails
significant risks that are not associated with similar investments in
<PAGE>
a conventional fixed-rate debt security. The Notes are financial
instruments that are suitable only for sophisticated investors who are
experienced with respect to derivatives and derivative transactions.
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 below, 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 the Notes and the suitability
of such Notes in light of their particular circumstances. For further
information, see "Description of Notes -- Indexed Notes" in the
accompanying Prospectus Supplement.
Loss of Interest
If the interest rate on a note is indexed, then changes in
the index may result in an interest rate that is less than that
payable on a conventional fixed rate debt security issued at the same
time. Up to all of the interest on the Notes will be placed at risk
from movements in the CPI. (See, "Risk Factors -- Consumer Price
Index" and "Historical Data", below.) The interest, if any, payable on
the Notes will be determined by applying the formula set forth under
"Interest - Determination of Semi-Annual Coupon" and will depend on
the CPI as of each of the dates specified in such formula. For these
reasons, Holders of Notes should be prepared to sustain a substantial
loss of their return on the Notes if the relative levels of the
Consumer Price Index are adverse to the holders of Notes.
Consumer Price Index
Holders of Notes will receive interest payments that will be
affected by changes in the CPI. Such changes may be significant. (See,
"Historical Data", below.) Changes in the CPI are a function of the
changes in specified consumer prices over time which result from the
interaction of many factors over which TMCC has no control.
In the past, the CPI has experienced periods of volatility
and such volatility may occur in the future. Fluctuations and trends
in the CPI that have occurred in the past are not necessarily
indicative, however, of fluctuations that may occur in the future.
In addition, the Congressionally-appointed Boskin Commission
concluded in its report released in December 1996 that the CPI
overstates increases in the cost of living and recommended significant
adjustments to the calculation of the index. Chairman of the Federal
Reserve Board, Alan Greenspan, also recently testified before Congress
to similar effect. To date, neither the BLS nor Congress has adopted
or mandated any change in the manner in which the CPI is calculated.
However, there can be no assurance that such a change will not be
adopted or mandated and that as a result, the amount of interest, if
any, payable on the Notes, and therefore the value of the Notes, will
not be significantly reduced.
<PAGE>
Illiquidity of Notes; Secondary Trading in the Notes
The Notes are a new issue of securities with no established
trading market. The Notes will not be traded on any exchange and there
can be no assurance that a secondary market for the Notes will develop
or, if developed, will continue or be liquid. Even if a market
develops for the Notes, it is expected that transaction costs in any
such secondary market will be high. As a result, if J.P. Morgan
Securities Inc. makes a market in the Notes, which it is not obligated
to do, the spread between bid and asked prices for Notes may be
substantial.
The secondary market for the Notes will be affected by a
number of factors independent of the creditworthiness of TMCC,
including the possibility that the CPI may be subject to significant
changes, that changes in the CPI may not correlate to changes with
interest rates generally or with changes in other indices, that the
resulting interest may be greater or less than that payable on other
securities of similar maturities, that in the event of sustained
deflation, the amount of the semiannual interest payments will
decrease, the volatility of the CPI, the time remaining to Maturity of
the Notes, the amount of other securities linked to the CPI, the
level, direction and volatility of market interest rates generally and
the fact that the rate of interest, if any, on the Notes with respect
to any given Interest Period will not be determinable until the end of
such period. Such factors also will affect the market value of the
Notes. The calculation of the Reference CPI is determined in arrears
and incorporates an approximate three-month lag, which may also have
an impact on the trading price of the Notes. The inability to
determine accrued interest until seven New York Business Days prior to
the Interest Payment Date may impact the liquidity of the Notes,
particularly during periods of significant, rapid changes in the CPI.
Accordingly, holders of Notes may not be able to sell Notes readily or
at prices that will enable holders to realize their anticipated yield.
No investor should purchase Notes unless such investor understands and
is able to bear the risk that the Notes may not be readily saleable,
that the value of the Notes will fluctuate over time and that such
fluctuations may be significant.
Conflicts of Interest
The Calculation Agent will enter into a swap transaction
with TMCC to hedge TMCC's exposure with respect to the Notes and,
depending on movements with respect to the CPI, may be obligated to
pay certain amounts to TMCC with respect to the swap. As a result, the
Calculation Agent may have a conflict of interest to the extent that
the Calculation Agent's trading activities or the determinations made
by the Calculation Agent in respect to the Notes affects the payments
due to or from the Calculation Agent under the related swap
transaction.
<PAGE>
EXAMPLE OF INTEREST CALCULATION
The following is an example of the calculation of the first
interest payment on the Notes using hypothetical CPI data and the
indicative Spread of 320 basis points:
Settlement Date: February 14, 1997
First Interest Payment Date: August 15, 1997
Spread over CPI: 320 basis points
Principal: $100,000,000
Nov-96 Dec-96 May-97 June-97
CPI 158.690 158.693 160.807 161.246
Reference CPIn-1 = Reference CPI2/14/97
= CPINov + (CPIDec - CPINov)*((Feb 14-Feb 1)/(actual # days in
Feb))
= 158.690 + (158.693 - 158.690)*13/28
= 158.69139
Reference CPIn = Reference CPI8/15/97
= CPIMay + (CPIJun - CPIMay)*((Aug 15-Aug 1)/(actual # of
days in Aug))
= 160.807 + (161.246 - 161.807)*14/31
= 161.00526
CPI Component = (161.00526/158.69139) - 1
= 1.45809%
Spread = 3.20000%
First Coupon = $100,000,000[(3.2000%)(182/365) +(1.45809%)]
= $3,053,706 (3.05371%)
First Coupon per $1,000 = $30.53706
THE FOREGOING EXAMPLE IS ILLUSTRATIVE ONLY. NO
REPRESENTATION IS MADE AS TO WHAT THE FIRST INTEREST PAYMENT, OR ANY
INTEREST PAYMENT, ON THE NOTES WILL BE.
The actual amount received on any Interest Payment Date will
depend upon the CPI in effect on the Interest Reset Date compared to
the CPI in effect on the prior Interest Reset Date (or the original
issue date in the case of the first calculation of interest).
Historical data regarding the CPI for the period indicated is set
forth below.
<PAGE>
HISTORICAL DATA
The table below sets forth for each of the dates listed, the
CPI as published by the BLS. Fluctuations in the CPI that have
occurred in the past are not necessarily indicative of fluctuations
that may occur in the future, which may be greater or less than those
that have occurred historically. The interest payable on the Notes is
adversely affected by decreases in the CPI.
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Date CPI
Jan 94 1.462
Feb 94 1.467
Mar 94 1.472
Apr 94 1.474
May 94 1.475
Jun 94 1.480
Jul 94 1.484
Aug 94 1.490
Sep 94 1.494
Oct 94 1.495
Nov 94 1.497
Dec 94 1.497
Jan 95 1.503
Feb 95 1.509
Mar 95 1.514
Apr 95 1.519
May 95 1.522
Jun 95 1.525
Jul 95 1.525
Aug 95 1.529
Sep 95 1.532
Oct 95 1.537
Nov 95 1.536
Dec 95 1.535
Jan 96 1.544
Feb 96 1.549
Mar 96 1.557
Apr 96 1.563
May 96 1.566
Jun 96 1.567
Jul 96 1.570
Aug 96 1.573
Sep 96 1.578
Oct 96 1.583
Nov 96 1.586
Dec 96 1.586
</TABLE>
Plan of Distribution
Under the terms of and subject to the conditions of a
Distribution Agreement dated as of October 17, 1991, as amended, (the
"Agreement"), between TMCC and J.P. Morgan Securities Inc. ("JP
<PAGE>
Morgan"), JP Morgan, acting as principal, has agreed to purchase and
TMCC has agreed to sell the Notes at a discount of 0.175%. JP Morgan
may resell the Notes to one or more investors or to one or more
broker-dealers (acting as principal for the purposes of resale) at
varying prices related to prevailing market prices at the time of
resale, as determined by JP Morgan.
Under the terms and conditions of the Agreement, JP Morgan
is committed to take and pay for all of the Notes offered hereby if
any are taken.
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
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, U. S. Holders whose functional currency
is other than the United States dollar, or persons who acquire, or for
income tax purposes are deemed to have acquired, the Notes in an
exchange or for property other than cash. The discussion below is
based upon the Internal Revenue Code of 1986, as amended, and final,
temporary and proposed United States Treasury Regulations. In
particular, the following discussion is based on certain Treasury
Regulations relating to contingent payment debt instruments and
variable rate debt instruments issued in final form on June 11, 1996
(the "Contingent Debt 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
under the caption "United States Taxation" in the Prospectus
Supplement.
Because (i) the issue price of the Notes does not exceed
their total noncontingent principal payments by more than a de minimis
amount, (ii) the Notes provide for stated interest at a single
objective rate, (iii) the objective rate in effect at any time during
the term of the Notes is a current value of that rate, and (iv) the
Notes do not provide for any contingent principal payments, the Notes
are treated as variable rate debt instruments under the Contingent
Debt Regulations. In addition, because the stated principal amount of
the Notes does not exceed their issue price by more than a de minimis
amount, the Notes are not treated as having OID.
The Contingent Debt Regulations provide special rules for
determining the amount and accrual of qualified stated interest on
<PAGE>
variable rate debt instruments. In general, the rules convert the
debt instruments into fixed rate debt instruments and then apply the
general OID rules to the debt instruments. In the case of variable
rate debt instruments such as the Notes, which provide for stated
interest at a single objective rate that is unconditionally payable in
cash at least annually, all stated interest with respect to the Notes
constitutes qualified stated interest. The amount of qualified stated
interest allocable to an accrual period is determined by assuming that
the variable rate is a fixed rate that reflects the yield that is
reasonably expected for the debt instrument. A U.S. Holder of the
Notes using the accrual method of accounting for tax purposes will
accrue ordinary interest income at a fixed rate that reflects the
reasonably expected yield on the Notes at the issue date. The
qualified stated interest allocable to an accrual period will be
increased (or decreased) if the interest actually paid during the
accrual period exceeds (or is less than) the interest assumed to be
paid during the accrual period. A U.S. Holder using the cash method
of accounting for tax purposes will treat all interest payments under
the Notes as ordinary interest income as paid.
A U.S. Holder will recognize gain or loss on the sale,
exchange or other disposition of its Notes, measured by the difference
between the fair market value of the consideration received (except to
the extent attributable to accrued interest) and the U.S. Holder s
adjusted tax basis in its Notes. Any such gain or loss generally will
be long-term capital gain or loss if the Notes have been held for more
than one year.
