<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended September 30, 1997
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 1-9961
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TOYOTA MOTOR CREDIT CORPORATION
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(Exact name of registrant as specified in its charter)
California 95-3775816
- ---------------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19001 S. Western Avenue
Torrance, California 90509
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 787-1310
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Securities registered pursuant to section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
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6.30% Fixed Rate Medium-Term
Notes due January 25, 1999 New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
As of November 30, 1997, the number of outstanding shares of capital
stock, par value $10,000 per share, of the registrant was 91,500, all of which
shares were held by Toyota Motor Sales, U.S.A., Inc.
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<PAGE>
PART I
ITEM 1. BUSINESS.
General
Toyota Motor Credit Corporation ("TMCC") is a wholly-owned subsidiary of
Toyota Motor Sales, USA, Inc. ("TMS") and was incorporated in California in
1982 and commenced operations in 1983. TMCC provides retail leasing, retail
and wholesale financing 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)and the Commonwealth of
Puerto Rico. TMCC has seven wholly-owned subsidiaries, four of which are
engaged in the insurance business, one limited purpose subsidiary formed
primarily to acquire and securitize retail finance receivables, one limited
purpose subsidiary formed primarily to acquire and securitize lease finance
receivables and one subsidiary which provides retail and wholesale financing
and certain other financial services to authorized Toyota and Lexus vehicle
dealers and their customers in the Commonwealth of Puerto Rico. TMCC and its
subsidiaries are collectively referred to as the "Company".
The Company's earnings are primarily impacted by the level of average earning
assets, comprised primarily of investments in operating leases and finance
receivables, and asset yields as well as outstanding borrowings and the cost
of funds. The Company's business is substantially dependent upon the sale of
Toyota and Lexus vehicles in the United States. Changes in the volume of
sales of such vehicles resulting from governmental action, changes in consumer
demand, changes in pricing of imported units due to currency fluctuations, or
other events, could impact the level of finance and insurance operations of
the Company. To date, the level of the Company's operations has not been
restricted by the level of sales of Toyota and Lexus vehicles.
An operating agreement between TMCC and TMS (the "Operating Agreement"),
provides that TMCC will establish its own financing rates and is under no
obligation to TMS to finance wholesale obligations from any dealers or retail
obligations of any customers. In addition, pursuant to the Operating
Agreement, TMS will arrange for the repurchase of new Toyota and Lexus
vehicles financed at wholesale by TMCC at the aggregate cost financed in the
event of dealer default. The Operating Agreement also specifies that TMS will
retain 100% ownership of TMCC as long as TMCC has any funded debt outstanding
and that TMS will make necessary equity contributions or provide other
financial assistance TMS deems appropriate to ensure that TMCC maintains a
minimum coverage on fixed charges of 1.10 times such fixed charges in any
fiscal quarter. Under the Operating Agreement, all loans by TMS to TMCC must
be subordinated to all other indebtedness of TMCC. As a result of the
reorganization of Toyota's manufacturing operations in the United States and
the accompanying establishment of Toyota Motor Manufacturing North America,
Inc. ("TMMNA") described below under "Toyota Motor Sales, U.S.A., Inc.", the
Operating Agreement was amended to require TMMNA, in addition to TMS, to
provide financial assistance as necessary to maintain TMCC's minimum fixed
charge coverage ratio and to require that any loans made by TMMNA to TMCC will
be subordinated at all times to other indebtedness of TMCC. The Operating
Agreement does not constitute a guarantee by TMS or TMMNA of any obligations
of TMCC. The fixed charge coverage provision of the Operating Agreement is
solely for the benefit of the holders of TMCC's commercial paper, and the
Operating Agreement may be amended or terminated at any time without notice
to, or the consent of, holders of other TMCC obligations.
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<PAGE>
Retail Leasing
TMCC purchases primarily new vehicle lease contracts originated by Toyota and
Lexus dealers. Lease contracts purchased must first meet TMCC's credit
standards after which TMCC assumes ownership of the leased vehicles and is
generally permitted to take possession of vehicles upon lessee default. TMCC
is responsible for contract collection and administration during the lease
period and for the value of the vehicle at lease maturity if the vehicle is
not purchased by the lessee or dealer. Off-lease vehicles returned to TMCC are
sold through a network of auction sites located throughout the United States.
TMCC requires lessees to carry fire, theft, collision and liability insurance
on leased vehicles covering the interests of both TMCC and the lessee. In
recent years, TMS has sponsored special lease programs by supporting reduced
lease rates. Leasing revenues contributed 83%, 82% and 78% to total financing
revenues for the fiscal years ended September 30, 1997, 1996 and 1995,
respectively.
In October 1996, TMCC created Toyota Lease Trust, a Delaware business trust
(the "Titling Trust"), to act as lessor and to hold title to leased vehicles
in specified states in connection with a lease securitization program. TMCC
acts as the servicer for lease contracts purchased by the Titling Trust from
Toyota and Lexus dealers and services such lease contracts in the same manner
as contracts owned directly by TMCC. TMCC holds an undivided trust interest
in lease contracts owned by the Titling Trust, and such lease contracts are
included in TMCC's lease assets, until such time as the beneficial interests
in such contracts are transferred in connection with a securitization
transaction.
Retail Financing
TMCC purchases primarily new and used vehicle installment contracts from
Toyota and Lexus dealers. Certain of the used vehicle contracts purchased by
TMCC are "Certified" Toyota and Lexus used vehicle contracts which relate to
vehicles purchased by dealers, reconditioned and certified to meet certain
Toyota and Lexus standards, and sold or leased with an extended warranty from
the manufacturer. Installment contracts purchased must first meet TMCC's
credit standards and thereafter TMCC retains responsibility for contract
collection and administration. TMCC acquires security interests in the
vehicles financed and generally can repossess vehicles if customers fail to
meet contract obligations. Substantially all of TMCC's retail financings are
non-recourse which relieves the dealers from financial responsibility in the
event of repossession. TMCC requires retail financing customers to carry
fire, theft and collision insurance on financed vehicles covering the
interests of both TMCC and the customer. In recent years, TMS has sponsored
special retail programs by supporting reduced interest rates. Retail
financing revenues contributed 14%, 14% and 18% to total financing revenues
for the fiscal years ended September 30, 1997, 1996 and 1995, respectively.
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<PAGE>
A summary of vehicle retail leasing and financing activity follows:
<TABLE>
<CAPTION>
Years Ended September 30,
-------------------------------------------------
1997 1996 1995 1994 1993
--------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Contract volume:
Lease................ 262,000 276,000 179,000 204,000 112,000
Retail............... 247,000 229,000 170,000 210,000 200,000
--------- -------- -------- -------- --------
Total............. 509,000 505,000 349,000 414,000 312,000
========= ======== ======== ======== ========
Average amount financed:
Lease................ $24,200 $23,300 $24,800 $23,700 $23,400
Retail............... $16,500 $16,200 $15,100 $14,000 $12,800
Outstanding portfolio at
period end ($Millions):
Lease............. $11,622 $11,917 $9,305 $7,569 $4,604
Retail............ $5,866 $5,105 $4,489 $5,162 $4,440
Number of accounts 1,061,000 1,069,000 946,000 929,000 750,000
</TABLE>
Retail receivables and interests in lease finance receivables sold, totaling
$2.4 billion as of September 30, 1997 and $1.1 billion as of September 30,
1996, which TMCC continues to service, are excluded from the outstanding
portfolio amounts in the above table.
Wholesale Financing
TMCC provides wholesale financing primarily to qualified Toyota and Lexus
vehicle dealers to finance inventories of new Toyota and Lexus vehicles and
used Toyota, Lexus and other vehicles. TMCC acquires security interests in
vehicles financed at wholesale, and substantially all such financings are
backed by corporate or individual guarantees from or on behalf of
participating dealers. In the event of dealer default, TMCC has the right to
liquidate any assets acquired and seek legal remedies pursuant to the
guarantees. Pursuant to the Operating Agreement, TMS will arrange for the
repurchase of new Toyota and Lexus vehicles financed at wholesale by TMCC at
the aggregate cost financed in the event of dealer default.
A summary of vehicle wholesale financing activity follows:
<TABLE>
<CAPTION>
Years Ended September 30,
------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Dealer loans ($Millions)..... $8,573 $8,017 $7,626 $7,055 $6,378
Dealer repayments ($Millions) $8,684 $8,221 $7,444 $7,032 $6,152
Outstanding portfolio at
period end ($Millions).... $563 $668 $886 $727 $703
Average amount financed
per vehicle............... $20,695 $19,926 $18,999 $17,530 $16,500
</TABLE>
TMCC also makes term loans to dealers for business acquisitions, facilities
refurbishment, real estate purchases and working capital requirements. These
loans are typically secured with liens on real estate, other dealership assets
and/or personal guarantees of the dealers. Wholesale and other dealer
financing revenues contributed 3%, 4% and 4% to total financing revenues for
the fiscal years ended September 30, 1997, 1996 and 1995, respectively.
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<PAGE>
Insurance
The principal activities of TMCC's insurance subsidiaries include marketing,
underwriting, claims administration and providing certain coverages related to
vehicle service agreements and contractual liability agreements sold by or
through Toyota and Lexus vehicle dealers and affiliates to customers. In
addition, the insurance subsidiaries insure and reinsure certain TMS and TMCC
risks. Income before income taxes from insurance operations contributed 12%,
7% and 6% to total income before income taxes for the fiscal years ended
September 30, 1997, 1996 and 1995, respectively.
Servicing
TMCC remains as servicer on accounts included in its asset-backed
securitization transactions and is paid a servicing fee.
Funding
Funding to support the Company's level of earning assets is provided by access
to the capital markets as well as earning asset liquidations and funds
provided by operating activities. Capital market funding has generally been
in the form of commercial paper, United States and Euro medium-term notes,
Eurobonds and transactions through the Company's asset-backed securitization
programs.
The Company uses a variety of derivative financial instruments to manage
interest rate and currency exchange exposures. The derivative instruments
utilized include cross currency and interest rate swap agreements, indexed
note swap agreements and option-based products. The Company does not use any
of these instruments for trading purposes.
Competition and Government Regulations
TMCC's primary competitors for retail leasing and financing are commercial
banks, savings and loan associations, credit unions, finance companies and
other captive automobile finance companies. Commercial banks and other
captive automobile finance companies also provide wholesale financing for
Toyota and Lexus dealers. Competition for the principal products and services
provided through the insurance operations is primarily from national and
regional independent service contract providers. TMCC's strategy is to
supplement, with competitive financing and insurance programs, the overall
commitment of TMS to offer a complete package of services to authorized Toyota
and Lexus dealers and their customers.
The finance and insurance operations of the Company are regulated under both
federal and state law. A majority of states have enacted legislation
establishing licensing requirements to conduct retail and other finance and
insurance activities. Most states also impose limits on the maximum rate of
finance charges. In certain states, the margin between the present statutory
maximum interest rates and borrowing costs is sufficiently narrow that, in
periods of rapidly increasing or high interest rates, there could be an
adverse effect on the Company's operations in these states if the Company were
unable to pass on increased interest costs to its customers. In addition,
state laws differ as to whether anyone suffering injury to person or property
involving a leased vehicle may bring an action against the owner of the
vehicle merely by virtue of that ownership. To the extent that applicable
state law permits such an action, TMCC may be subject to liability to such an
injured party. However, the laws of most states either do not permit such
suits or limit the lessor's liability to the amount of any liability insurance
that the lessee was required under applicable law to maintain (or, in some
states, the lessor was permitted to maintain), but failed to maintain. TMCC's
lease contracts contain provisions requiring the lessees to maintain levels of
insurance satisfying applicable state law and TMCC maintains certain levels of
contingent liability insurance for protection from catastrophic claims.
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<PAGE>
The Company's operations are also subject to regulation under federal and
state consumer protection statutes. The Company continually reviews its
operations for compliance with applicable laws. Future administrative
rulings, judicial decisions and legislation may require modification of the
Company's business practices and documentation.
Employee Relations
At November 30, 1997, the Company had approximately 2,400 full-time employees.
The Company considers its employee relations to be good.
Segment Information
Financial information regarding industry segments is set forth in Note 16 of
the Notes to Consolidated Financial Statements.
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<PAGE>
Toyota Motor Sales, U.S.A., Inc.
TMS was established in 1957 and as of September 30, 1997 is a wholly-owned
subsidiary of Toyota Motor North America, Inc. ("TMA"). 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). Additionally, TMS exports automobiles and related
replacement parts and accessories to Europe, Asia and United States
territories. Through September 30, 1996, TMS manufactured certain automobiles
through Toyota Motor Manufacturing, U.S.A., Inc., and manufactured trucks
through Toyota Auto Body Corporation, Inc. ("TABC"), a wholly owned
subsidiary. Effective October 1, 1996, Toyota Motor Manufacturing North
America, Inc. ("TMMNA") was established to serve as the holding company for
all manufacturing operations in the United States and to coordinate and
support numerous manufacturing related administrative functions previously
carried out independently by various Toyota entities in North America and by
Toyota Motor Corporation ("TMC") in Japan. Both TMMNA and TMS are wholly-
owned subsidiaries of TMA, a holding company owned 100% by TMC which was
established on September 3, 1996.
TMS's corporate headquarters is located in Torrance, California. TMS has port
facilities, regional sales offices and parts distribution centers located
throughout the United States. Toyota vehicles are distributed in the United
States in twelve regional sales areas, ten of which are operated by or through
TMS and two which are serviced by private distributors who purchase vehicles
directly from TMS and distribute to Toyota dealers within their respective
regions. For the year ended September 30, 1997, these private distributors,
Gulf States Toyota, Inc. of Houston, Texas and Southeast Toyota Distributors,
Inc. of Deerfield Beach, Florida, accounted for approximately 31% of the
Toyota vehicles sold in the United States (excluding Hawaii). Lexus vehicles
are directly distributed by TMS to Lexus dealers throughout the United States
(excluding Hawaii).
For the year ended September 30, 1997, TMS sold approximately 1,190,000
automobiles and light trucks in the United States (excluding Hawaii), of which
approximately 731,000 were manufactured in the United States; TMS exported
approximately 39,000 automobiles. TMS sales represented approximately 27% of
TMC's worldwide sales volume for the year ended March 31, 1997. For the years
ended September 30, 1997 and 1996, Toyota and Lexus vehicles accounted for
approximately 8.0% and 7.5%, respectively, of all retail automobile and light
truck sales in the United States.
Total revenues for TMS for the fiscal years ended September 30, 1997, 1996 and
1995, aggregated approximately $28.8 billion, $27.5 billion and $26.2 billion,
respectively, of which approximately $25.3 billion, $24.4 billion and
$23.7 billion, respectively, were attributable to revenues other than those
associated with financial services. At September 30, 1997, 1996 and 1995, TMS
had total assets of approximately $23.6 billion, $25.1 billion and
$21.1 billion, respectively. TMS had net worth in excess of $4.1 billion and
net income in excess of $225 million for each of the fiscal years ended
September 30, 1997, 1996 and 1995.
Total revenues for TMMNA for the fiscal year ended September 30, 1997
aggregated approximately $10.6 billion, all of which was attributable to
revenues other than those associated with financial services. At
September 30, 1997, TMMNA had total assets of approximately $3.5 billion, and
net worth in excess of $2.1 billion. TMMNA had net income in excess of
$100 million for the fiscal year ended September 30, 1997.
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<PAGE>
ITEM 2. PROPERTIES.
The headquarters of the Company is located in Torrance, California, with 33
branch offices in cities throughout the United States and one branch office in
the Commonwealth of Puerto Rico. A financial service center is located in
Cedar Rapids, Iowa. All premises are occupied under lease.
ITEM 3. LEGAL PROCEEDINGS.
Various claims and actions are pending against TMCC and its subsidiaries with
respect to financing activities, taxes and other matters arising from the
ordinary course of business. Certain of these actions are or purport to be
class action suits. Management and internal and external counsel perform
periodic reviews of pending claims and actions to determine the probability of
adverse verdicts and resulting amounts of liability. The amounts of liability
on pending claims and actions as of September 30, 1997 were not determinable;
however, in the opinion of management, the ultimate liability resulting
therefrom should not have a material adverse effect on TMCC's consolidated
financial position or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
TMCC is a wholly-owned subsidiary of TMS and, accordingly, all shares of the
Company's stock are owned by TMS. There is no market for TMCC's stock.
No dividends have been declared or paid to date.
-8-
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA.
<TABLE>
<CAPTION>
Years Ended September 30,
-------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
(Dollars in Millions)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Financing Revenues:
Leasing.......................... $ 2,739 $ 2,454 $ 1,902 $ 1,230 $ 751
Retail financing................. 446 415 431 413 468
Wholesale and other
dealer financing.............. 89 109 121 86 80
------- ------- ------- ------- -------
Total financing revenues......... 3,274 2,978 2,454 1,729 1,299
Depreciation on leases........... 1,790 1,626 1,230 735 385
Interest expense................. 918 820 716 486 454
------- ------- ------- ------- -------
Net financing revenues........... 566 532 508 508 460
Other revenues................... 176 136 113 95 80
------- ------- ------- ------- -------
Net financing revenues
and other revenues............ 742 668 621 603 540
------- ------- ------- ------- -------
Expenses:
Operating and administrative..... 323 293 255 232 225
Provision for credit losses...... 136 115 66 78 60
------- ------- ------- ------- -------
Total expenses................... 459 408 321 310 285
------- ------- ------- ------- -------
Income before income taxes....... 283 260 300 293 255
Provision for income taxes....... 121 108 117 118 97
------- ------- ------- ------- -------
Net Income....................... $ 162 $ 152 $ 183 $ 175 $ 158
======= ======= ======= ======= =======
Ratio of earnings to
fixed charges................. 1.31 1.32 1.42 1.60 1.56
BALANCE SHEET DATA
Investments in operating
leases, net.................... $10,257 $10,831 $8,148 $6,215 $3,050
Finance receivables, net......... $8,452 $7,474 $7,227 $7,834 $7,226
Total assets..................... $19,830 $19,309 $16,225 $14,791 $11,179
Notes and loans payable.......... $14,745 $15,014 $12,696 $11,833 $8,833
Capital stock.................... $915 $915 $865 $865 $680
Retained earnings................ $1,159 $997 $844 $662 $487
</TABLE>
Certain prior period amounts have been reclassified to conform with the
current period presentation.
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<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net Income
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The following table summarizes TMCC's net income by business segment for the
fiscal years ended September 30, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
Years Ended September 30,
------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
(Dollars in Millions)
Net income:
Financing operations................ $142 $140 $171
Insurance operations................ 20 12 12
---- ---- ----
Total net income................. $162 $152 $183
==== ==== ====
</TABLE>
The increase in TMCC's consolidated net income in fiscal 1997 is primarily
attributable to earnings growth in TMCC's insurance operations, while the
decline in fiscal 1996 net income reflects primarily higher provisions for
vehicle disposition and credit losses and lower net interest margins in TMCC's
financing operations. Net interest margins reflect the difference between
interest rates implicit in leases and charged on retail, wholesale and other
finance receivables, and interest rates paid on borrowings.
Net income from financing operations increased 1% in fiscal 1997 and decreased
18% in fiscal 1996. The increase in fiscal 1997 reflects higher net financing
revenues attributable to earning asset growth and increased income from asset-
backed securitization transactions, substantially offset by lower net interest
margins, higher vehicle disposition and credit losses and increased personnel
and operating expenses attributable to the increased account base. The
decrease in fiscal 1996 reflects higher provisions for credit and vehicle
disposition losses, lower net interest margins and higher personnel and
operating expenses partially offset by higher financing revenues from earning
asset growth and increased income from asset-backed securitization
transactions.
Net income from insurance operations increased 67% in fiscal 1997 and remained
stable in fiscal 1996. The increase in fiscal 1997 reflects increased
underwriting profit from providing coverage under various agreements as well
as higher investment income.
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<PAGE>
Earning Assets
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The composition of TMCC's net earning assets (excluding retail receivables and
interests in lease finance receivables sold through securitization
transactions), contract volume and finance penetration as of and for the years
ended September 30, 1997, 1996, and 1995 are as follows:
<TABLE>
<CAPTION>
September 30,
---------------------------
1997 1996 1995
------- ------- -------
(Dollars in Millions)
<S> <C> <C> <C>
Vehicle lease
Investment in operating leases, net........ $10,124 $10,745 $8,084
Finance leases, net........................ 1,498 1,172 1,221
------- ------- -------
Total vehicle leases......................... 11,622 11,917 9,305
Vehicle retail finance receivables, net...... 5,866 5,105 4,489
Vehicle wholesale and other receivables...... 1,434 1,486 1,752
Allowance for credit losses.................. (213) (203) (171)
------- ------- -------
Total net earning assets..................... $18,709 $18,305 $15,375
======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
Years Ended September 30,
---------------------------
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Contract volume:
Vehicle lease............................. 262,000 276,000 179,000
Vehicle retail............................ 247,000 229,000 170,000
------- ------- -------
Total........................................ 509,000 505,000 349,000
======= ======= =======
TMS sponsored contract volume:
Vehicle lease............................. 72,000 190,000 111,000
Vehicle retail............................ 17,000 52,000 48,000
------- ------- -------
Total........................................ 89,000 242,000 159,000
======= ======= =======
Retail volume:
New volume................................ 144,000 157,000 125,000
Used volume............................... 103,000 72,000 45,000
------- ------- -------
Total........................................ 247,000 229,000 170,000
======= ======= =======
Finance penetration (excluding fleet)........ 36.2% 41.2% 31.8%
</TABLE>
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<PAGE>
TMCC's net earning assets as of September 30, 1997 increased from
September 30, 1996 due to growth in retail earning assets, partially offset by
a decline in lease and wholesale earning assets. Retail earning assets
increased from 1996 primarily due to a higher level of used vehicle (primarily
increased Toyota and Lexus Certified used vehicles) financing in 1997,
partially offset by the sale of finance receivables totaling $784 million in
April 1997. Lease earning assets, consisting of investment in operating
leases, net of accumulated depreciation, and lease finance receivables, net of
unearned income, declined in 1997 from 1996 due to a higher level of lease
maturities and the sale of $1.3 billion of interests in lease finance
receivables during September 1997 in connection with a securitization
transaction. The decline in wholesale earning assets from 1996 levels is
attributable primarily to lower dealer inventories as a result of strong
demand for certain Toyota and Lexus vehicles. The increase in allowance for
credit losses reflects asset growth as well as an increased mix of used
vehicles in the retail portfolio for which loss reserves are provided at
higher levels than new vehicles.
In October 1996, TMCC created Toyota Lease Trust, a Delaware business trust
(the "Titling Trust"), to act as a lessor and to hold title to leased vehicles
in specified states. The value of the lease contracts purchased by the
Titling Trust in fiscal 1997 represented approximately 22% of all lease
contracts purchased by both TMCC and the Titling Trust. Substantially all
leases owned by the Titling Trust are classified as finance receivables due to
certain residual value insurance arrangements in place with respect to such
leases, while leases of similar nature originated outside of the Titling Trust
are classified as operating leases. The continued acquisition of leases by
the Titling Trust is expected to cause a shift in the composition of earning
assets from operating leases to finance receivables due to the classification
differences described above.
TMCC's net earning assets as of September 30, 1996 increased from
September 30, 1995 primarily due to growth in lease earning assets due to
higher lease volume attributable to special lease programs sponsored by TMS.
TMS sponsors special lease and retail programs which allow TMCC to offer
reduced monthly payments on certain Toyota and Lexus new vehicles and Toyota
industrial equipment to qualified lease and retail customers. Support amounts
received from TMS approximate the balances required by TMCC to maintain
revenues at standard program levels and are earned over the expected lease and
retail installment contract terms. The level of sponsored program activity
varies based on TMS marketing strategies and revenues earned vary based on the
mix of Toyota and Lexus vehicles, timing of programs and the level of support
provided. TMCC's revenues earned from TMS sponsored special lease and retail
contracts outstanding totaled $174 million, $174 million and $134 million for
fiscal years 1997, 1996 and 1995, respectively.
TMCC's lease contract volume for the year ended September 30, 1997 declined
from 1996 levels as a result of lower finance penetration attributable to
reduced levels of lease programs sponsored by TMS. This decline was
substantially offset by the strong sales of Toyota and Lexus vehicles as a
result, in part, of consumer acceptance and competitive pricing of certain new
and redesigned 1997 Toyota and Lexus models and TMCC's competitive leasing
programs.
TMCC's retail contract volume for the year ended September 30, 1997 increased
from 1996 levels as a result of higher used contract volume and strong Toyota
and Lexus sales, partially offset by slightly lower finance penetration
attributable to reduced TMS sponsored special retail programs.
Higher contract volume and finance penetration in 1996 compared to 1995
reflected increased volume primarily attributable to the TMS sponsored special
lease programs.
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<PAGE>
Financing Revenue and Other Revenues
- ------------------------------------
TMCC's total financing revenues increased 10% in fiscal 1997 and 21% in fiscal
1996. The increase in fiscal 1997 reflects growth in average retail and lease
earning assets, partially offset by a decline in average wholesale earning
assets. The increase in fiscal 1996 reflects growth in average lease earning
assets, partially offset by a decline in average retail and wholesale earning
assets. TMCC's continued use of the Titling Trust to purchase leases, which
may be sold in connection with securitization transactions, is expected to
shift the composition of earning assets from operating leases to finance
receivables, as discussed earlier, and will result in increased revenues from
finance leases (until such interests in leases are sold in securitization
transactions) and reduced operating lease revenues and depreciation expense.
The following table summarizes TMCC's other income for the fiscal years ended
September 30, 1997, 1996 and 1995:
<TABLE>
<CAPTION>
Years Ended September 30,
--------------------------
1997 1996 1995
---- ---- ----
(Dollars in Millions)
<S> <C> <C> <C>
Insurance operations revenues............... $130 $110 $98
Gains and servicing fees on assets sold..... 40 23 13
Investment and other income................. 6 3 2
---- ---- ----
Total other income....................... $176 $136 $113
==== ==== ====
</TABLE>
Insurance operations revenues increased 19% in fiscal 1997 due to higher
underwriting revenues associated with in-force agreements as well as increased
investment income. The increase in such revenues in fiscal 1996 is due
primarily to higher underwriting revenues associated with in-force agreements.
The increases in gains and servicing fee income in fiscal 1997 and 1996
reflect an increase in the amount of assets sold through the Company's asset-
backed securitization programs. Gains recognized on asset-backed
securitization transactions generally accelerate the recognition of income on
lease and retail contracts, net of servicing fees and other related deferrals,
into the period the assets are sold. Numerous factors can affect the timing
and amounts of these gains, such as the type and amount of assets sold, the
structure of the sale and current financial market conditions.
-13-
<PAGE>
Lease Depreciation
- ------------------
Included in lease depreciation expense are: (i) straight-line depreciation
expense on operating leases to the contractual residual value (ii) provision
for residual value losses on operating leases and (iii) actual vehicle
disposition losses and gains. Operating lease depreciation expense increased
$164 million and $394 million during fiscal 1997 and fiscal 1996,
respectively, primarily due to growth in average operating lease assets. The
provision for losses on returned operating lease vehicles declined $48 million
in fiscal 1997 and increased $34 million during fiscal 1996. The reduction in
the rate of growth of the allowance in 1997 is consistent with the slowing
rate of growth in lease assets and the Company's determination that the
overall level of the allowance is appropriate. The increase in provision in
1996 was consistent with the high growth in operating lease assets from 1995
levels. Vehicle disposition losses increased $61 million and $22 million
during fiscal 1997 and fiscal 1996, respectively, reflecting primarily
increased volume of returned units corresponding with a higher level of
scheduled maturities and a higher vehicle return rate. TMCC's operating lease
portfolio includes contracts with terms ranging from 12 to 54 months; the
average original contract term in TMCC's operating lease portfolio was
35 months at September 30, 1997 and 36 months at September 30, 1996,
respectively. As discussed earlier, the continued acquisition of leases by
the Titling Trust is expected to shift the composition of earning assets from
operating leases to finance receivables which will result in increased
revenues from finance leases (until such interests in leases are sold in
securitization transactions) and reduced operating lease revenues and
depreciation expense.
TMCC is subject to residual value risk in connection with its lease portfolio;
TMCC's residual value risk is a function of the number of off-lease vehicles
returned for disposition and any shortfall between the net disposition
proceeds and the estimated unguaranteed residual values on returned vehicles.
Total unguaranteed residual values related to TMCC's vehicle lease portfolio
totaled approximately $9.0 billion and $8.8 billion at September 30, 1997 and
1996, respectively. The percentage of lease vehicles returned to and disposed
of by TMCC which were originally scheduled to mature during fiscal 1997 was
18% as compared to 14% and 11% during fiscal 1996 and 1995, respectively.
TMCC maintains an allowance for estimated losses on lease vehicles returned to
the Company for disposition at lease termination. The level of allowance
required to cover future vehicle disposition losses is based upon projected
vehicle return rates and projected residual value losses on core models
derived from market information on used vehicle sales, historical factors,
including lease return trends, and general economic factors. The provision
for losses on returned lease vehicles is included in TMCC's depreciation
expense for operating leases and in leasing revenues for direct finance
leases. Actual vehicle disposition losses and gains are included in
depreciation expense. As the lease portfolio has matured the level of vehicle
lease returns have increased; however, the Company actively manages
disposition of its lease vehicles and believes that its lease earning assets,
net of the allowance for losses, are recorded at net realizable value.
Interest Expense
- ----------------
Interest expense increased 12% and 15% in fiscal 1997 and 1996, respectively.
The increase in fiscal 1997 reflects higher average borrowings outstanding
required to fund the growth in average earning assets, slightly offset by a
decline in the average cost of borrowings. The increase in fiscal 1996
reflects higher average borrowings outstanding and an increase in the average
cost of borrowings. The weighted average cost of borrowings was 5.87%, 5.90%
and 5.78% for the years ended September 30, 1997, 1996 and 1995, respectively.
-14-
<PAGE>
Operating and Administrative Expenses
- -------------------------------------
Operating and administrative expenses increased 10% and 15% in fiscal 1997 and
1996, respectively. The increases reflect primarily additional personnel and
operating costs required to support TMCC's growing customer base as well as
growth in the Company's insurance operations. TMCC anticipates continued
growth in expenses reflecting increasing headcount and operating costs
associated with portfolio growth and expanded customer service activities as
well as costs in connection with computer system and software modifications to
address year 2000 issues.
Provision for Credit Losses
- ---------------------------
TMCC's provision for credit losses increased 18% and 74% during fiscal 1997
and fiscal 1996, respectively. The increase in fiscal 1997 reflects higher
credit losses, increasing mix of used vehicles in the retail portfolio and
earning asset growth. The increase in fiscal 1996 was primarily related to
the growth in earning assets and higher credit losses. Higher credit losses
in 1997 reflect an increasing number of repossessed vehicles and higher losses
per repossessed vehicle attributable to greater lease and retail accounts
outstanding, higher mix of used vehicles in the retail portfolio which
historically produce higher losses than new business and maturing of the lease
portfolio. TMCC has not significantly altered its underwriting standards.
Allowances for credit losses are evaluated periodically, considering
historical loss experience and other factors, and are considered adequate to
cover expected credit losses as of September 30, 1997.
-15-
<PAGE>
An analysis of credit losses and the related allowance follows, excluding net
losses on receivables sold subject to limited recourse provisions:
<TABLE>
<CAPTION>
Years ended September 30,
------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
(Dollars in Millions)
<S> <C> <C> <C> <C> <C>
Allowance for credit losses
at beginning of period......... $203 $171 $164 $121 $107
Provision for credit losses....... 136 115 66 78 60
Charge-offs....................... (116) (81) (63) (47) (51)
Recoveries........................ 12 12 12 12 11
Other Adjustments................. (22) (14) (8) - (6)
---- ---- ---- ---- ----
Allowance for credit losses
at end of period............... $213 $203 $171 $164 $121
==== ==== ==== ==== ====
Allowance as a percent of net
investments in operating
leases and net receivables
outstanding.................... 1.13% 1.10% 1.10% 1.15% 1.16%
Losses as a percent of average
net investments in operating
leases and average net
receivables outstanding........ .55% .41% .34% .30% .41%
Aggregate balances at end of
period for lease rentals
and installments 60
or more days past due.......... $30 $29 $20 $15 $16
Aggregate balances at end of
period for lease rentals
and installments 60 or more
days past due as a percent
of net investments in operating
leases and gross receivables
outstanding.................... .15% .15% .12% .10% .14%
</TABLE>
-16-
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company requires, in the normal course of business, substantial funding to
support the level of its earning assets. Significant reliance is placed on
the Company's ability to obtain debt funding in the capital markets in
addition to funding provided by earning asset liquidations and cash provided
by operating activities as well as transactions through the Company's asset-
backed securities programs. Debt issuances have generally been in the form of
commercial paper, United States and Euro medium-term notes ("MTNs") and
Eurobonds. On occasion, this funding has been supplemented by loans and
equity contributions from TMS.
Commercial paper issuances are utilized to meet short-term funding needs.
Commercial paper outstanding under TMCC's commercial paper program ranged from
approximately $1.2 billion to $3.0 billion during fiscal 1997, with an average
outstanding balance of $1.9 billion. For additional liquidity purposes, TMCC
maintains syndicated bank credit facilities with certain banks which
aggregated $2.0 billion at September 30, 1997. No loans were outstanding
under any of these bank credit facilities during fiscal 1997. TMCC also
maintains, along with TMS, uncommitted, unsecured lines of credit with banks
totaling $250 million. At September 30, 1997, TMCC had issued approximately
$24 million in letters of credit, primarily related to the Company's insurance
operations.
Long-term funding requirements are met through the issuance of a variety of
debt securities underwritten in both the United States and international
capital markets. United States and Euro MTNs and Eurobonds have provided TMCC
with significant sources of funding. During fiscal 1997, TMCC issued
approximately $4.6 billion of MTNs and Eurobonds of which approximately
$4.4 billion had original maturities greater than one year.
The original maturities of all MTNs and Eurobonds outstanding at September 30,
1997 ranged from one to eleven years. At September 30, 1997, the amounts
outstanding under MTNs and Eurobonds, including the effect of foreign currency
translations at September 30, 1997 spot exchange rates, are as follows:
<TABLE>
<CAPTION>
Total
U.S. and
Foreign Foreign
Currency Currency
Denominated Denominated
------------- -------------
<S> <C> <C>
MTNs.............................. $10.6 billion $4.5 billion
Eurobonds......................... 2.5 billion 1.5 billion
------------- ------------
$13.1 billion $6.0 billion
============= ============
</TABLE>
-17-
<PAGE>
TMCC anticipates continued use of MTNs in both the United States and
international capital markets. At November 30, 1997, approximately
$483 million was available for issuance under TMCC's United States public MTN
program, $15 million of which was committed for issue by the Company. The
maximum aggregate principal amount authorized to be outstanding at any time
under TMCC's Euro MTN program is $16.0 billion, which was increased in July
1997 from the prior maximum of $12.0 billion. Approximately $5.6 billion was
available for issuance under the Euro MTN program as of November 30, 1997, of
which the Company has committed to issue approximately $21 million. The
United States and Euro MTN programs may be expanded from time to time to allow
for the continued use of these sources of funding. In addition, approximately
$700 million of securities registered with the Securities and Exchange
Commission, excluding MTNs, were available for issuance at November 30, 1997.
Additionally, TMCC utilizes its asset-backed securitization programs to
generate funds for investment in earning assets. During the year ended
September 30, 1997, TMCC sold retail finance receivables totaling $784 million
and interests in lease finance receivables totaling $1,283 million as
described in Note 7 of the Notes to the Consolidated Financial Statements. On
October 1, 1996, Toyota Lease Trust was created as a Delaware business trust
for the purpose of titling leases, originated in certain states, in connection
with the lease securitization program. TMCC anticipates that the number and
principal amount of leases purchased by the Toyota Lease Trust will comprise a
significant and increasing percentage of what otherwise would have been TMCC's
lease portfolio; however, until leases are included in a securitization
transaction, they will continue to be classified as finance receivables on
TMCC's balance sheet.
TMCC utilizes a variety of interest rate and currency derivative financial
instruments to manage interest rate and currency exchange exposures. The
derivative instruments utilized include cross currency and interest rate
swaps, indexed note swaps and option-based products. TMCC does not use any of
these instruments for trading purposes. The total notional amount of TMCC's
derivative financial instruments at September 30, 1997 and 1996 was
$20.8 billion and $20.5 billion, respectively. The notional amounts of
interest rate and indexed note swap agreements and option-based products do
not represent amounts exchanged by the parties and, thus, are not a measure of
the Company's exposure through its use of derivatives. The only market rate
risk related to TMCC's portfolio is interest rate risk as foreign currency
risks are entirely hedged through cross currency interest rate swap
agreements.
TMCC utilizes interest rate swap agreements in managing its exposure to
interest rate fluctuations. Interest rate swap agreements are executed as an
integral part of specific debt transactions or on a portfolio basis. TMCC's
interest rate swap agreements involve agreements to pay fixed and receive a
floating rate, or receive fixed and pay a floating rate, at specified
intervals, calculated on an agreed-upon notional amount. Interest rate swap
agreements may also involve basis swap contracts which are agreements to
exchange the difference between certain floating interest amounts, such as the
net payment based on the commercial paper rate and the London Interbank
Offered Rate ("LIBOR"), calculated on an agreed-upon notional amount.
-18-
<PAGE>
TMCC also utilizes option-based products in managing its exposure to interest
rate fluctuations. Option-based products are executed on a portfolio basis
and consist primarily of purchased interest rate cap agreements. Option-based
products are agreements which either grant TMCC the right to receive or
require TMCC to make payments at specified interest rate levels.
TMCC utilizes indexed note swap agreements in managing its exposure in
connection with debt instruments whose interest rate and/or principal
redemption amounts are derived from other underlying instruments. Indexed
note swap agreements involve agreements to receive interest and/or principal
amounts associated with the indexed notes, denominated in either U.S. dollars
or a foreign currency, and to pay fixed or floating rates on fixed U.S. dollar
liabilities.
TMCC utilizes cross currency interest rate swap agreements to entirely hedge
exposure to exchange rate fluctuations on principal and interest payments for
borrowings denominated in foreign currencies. Notes and loans payable issued
in foreign currencies are hedged by concurrently executed cross currency
interest rate swap agreements which involve the exchange of foreign currency
principal and interest obligations for U.S. dollar obligations at agreed-upon
currency exchange and interest rates.
Derivative financial instruments utilized by TMCC involve, to varying degrees,
elements of credit risk in the event a counterparty should default and market
risk as the instruments are subject to rate and price fluctuations. Credit
risk is managed through the use of credit standard guidelines, counterparty
diversification, monitoring of counterparty financial condition and master
netting agreements in place with all derivative counterparties. TMCC does not
currently anticipate non-performance by any of its counterparties and has no
reserves related to non-performance as of September 30, 1997; TMCC has not
experienced any counterparty default during the three years ended
September 30, 1997.
Changes in interest rates may impact TMCC's future weighted average interest
rate on outstanding debt as a result of floating rate liabilities. As of
September 30, 1997, an interest rate increase of 1% (100 basis points) would
raise TMCC's weighted average interest rate, including the effects of interest
rate swap agreements and option-based products, by .58%, from 5.72% to an
estimated 6.30%. Conversely, an interest rate decrease of 1% (100 basis
points) would lower TMCC's weighted average interest rate, including the
effects of interest rate swap agreements and option-based products, by .77%,
from 5.72% to an estimated 4.95% at September 30, 1997.
TMCC uses a value-at-risk methodology, in connection with other management
tools, to assess and manage the interest rate risk of aggregated loan and
lease assets and financial liabilities, including interest rate derivatives
and option-based products. Value-at-risk represents the potential losses for
a portfolio from adverse changes in market factors for a specified period of
time and likelihood of occurrence (i.e. level of confidence). TMCC's value-
at-risk methodology incorporates the impact from adverse changes in market
interest rates but does not incorporate any impact from other market changes,
such as foreign currency exchange rates or commodity prices, which do not
affect the value of TMCC's portfolio. The methodology assumes that changes in
interest rates are lognormally distributed. For options and instruments with
non-linear returns, the model uses the Black Scholes method to approximate
changes in fair value. The value-at-risk methodology excludes changes in fair
values related to investments in marketable securities as these amounts are
not significant. TMCC estimates value-at-risk using historical interest rate
volatilities for the past two years and a stratified random sampling
methodology.
-19-
<PAGE>
The value at risk of TMCC's portfolio as of September 30, 1997, measured as
the potential 30 day loss in fair value from assumed adverse changes in
interest rates is as follows:
<TABLE>
<CAPTION>
As of
September 30, 1997
------------------
<S> <C>
Mean portfolio value...................... $3,640.0 million
Value at risk............................. $51.8 million
Percentage of the mean portfolio value.... 1.4%
Confidence level.......................... 95.0%
</TABLE>
TMCC's calculated value-at-risk exposure represents an estimate of reasonably
possible net losses that would be recognized on its portfolio of financial
instruments assuming hypothetical movements in future market rates and is not
necessarily indicative of actual results which may occur. It does not
represent the maximum possible loss nor any expected loss that may occur,
since actual future gains and losses will differ from those estimated, based
upon actual fluctuations in market rates, operating exposures, and the timing
thereof, and changes in the composition of TMCC's portfolio of financial
instruments during the year.
On occasion, TMS has made equity contributions to maintain TMCC's equity
capitalization at certain levels. No equity contributions were made during
fiscal 1997. Also, on occasion, TMS makes interest-bearing loans to TMCC.
There were no loans from TMS during fiscal 1997.
TMCC's ratio of earnings to fixed charges was 1.31, 1.32 and 1.42 in the years
ended September 30, 1997, 1996, and 1995, respectively. The decline in the
ratio from 1995 levels reflects increased interest expense corresponding with
higher debt levels to support earning asset growth. Additionally, earnings
have declined from 1995 levels due to higher vehicle disposition losses on
off-lease vehicles, higher credit losses and increased operating expenses
attributable to TMCC's growing customer base. TMCC management does not
believe that the declining ratio of earnings to fixed charges is indicative of
a material decline in the liquidity of the Company.
Cash flows provided by operating, investing and financing activities have been
used primarily to support earning asset growth. Cash provided by the
liquidation of earning assets, totaling $15.6 billion and $13.6 billion during
fiscal 1997 and 1996, respectively, was used to purchase additional
investments in operating leases and finance receivables, totaling
$19.9 billion and $19.2 billion during fiscal 1997 and 1996, respectively.
Investing activities resulted in a net use of cash of $2.3 billion and
$4.8 billion in fiscal 1997 and 1996, respectively, as the purchase of
additional earning assets, primarily investments in operating leases, exceeded
cash provided by the liquidation of earning assets. Net cash provided by
operating activities totaled $2.0 billion and $2.3 billion during fiscal 1997
and 1996, respectively, and net cash provided by financing activities totaled
$0.3 billion and $2.6 billion, during fiscal 1997 and 1996, respectively. The
Company believes that cash provided by operating and investing activities as
well as access to domestic and international capital markets, the issuance of
commercial paper and asset-backed securitization transactions will provide
sufficient liquidity to meet its future funding requirements.
-20-
<PAGE>
Year 2000 Computer Issue
- ------------------------
Several of the computer systems and software packages currently used by TMCC
will not function properly in the year 2000 without modification; potential
year 2000 malfunctions include erroneous system calculations and/or complete
system failure. The Company has developed an action plan to utilize both
internal resources and outside contractors to perform the necessary system and
program modifications. The Company expects to substantially resolve year 2000
issues in fiscal year 1998 and 1999 and does not anticipate any related
business interruptions.
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the
Private Securities Litigation Reform Act of 1995
The foregoing Business description and Management's Discussion and Analysis
contain various "forward looking statements" within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, which represent the Company's expectations
or beliefs concerning future events, including the following: that the Company
considers its employee relations to be good; that the lease earning assets on
the Company's books are recorded at net realizable value; that allowances for
credit losses are considered adequate to cover expected credit losses; that
the ultimate liability resulting from pending claims and actions should not
have a material adverse effect on the Company's consolidated financial
position or results of operations; that TMCC anticipates continued growth in
operating expenses associated with portfolio growth, expanded customer service
activities and computer system and software modifications to address year 2000
issues; that the Company expects to substantially resolve year 2000 issues in
fiscal year 1998 and 1999 and does not anticipate any related business
interruptions; that the number and principal amount of leases purchased by the
Toyota Lease Trust will comprise a significant and increasing percentage of
what otherwise would have been TMCC's lease portfolio; that the purchase of
leases by the Titling Trust is expected to cause a shift in the composition of
earning assets from operating leases to finance receivables, resulting in
increased revenues from finance leases (until such interests in leases are
sold in securitization transactions) and reduced operating lease revenues and
depreciation expense; that the Company does not currently anticipate non-
performance by any of its counterparties; that TMCC anticipates the continued
use of the Titling Trust in connection with securitization transactions; the
Company's continued use of MTNs in the United States and the international
capital markets; that the declining ratio of earnings to fixed charges is not
indicative of a material decline in the liquidity of the Company; that cash
provided by operating and investing activities as well as access to domestic
and international capital markets, the issuance of commercial paper and asset-
backed securitization transactions will provide sufficient liquidity to meet
the Company's future funding requirements.
-21-
<PAGE>
The Company cautions that these statements are further qualified by important
factors that could cause actual results to differ materially from those in the
forward looking statements, including, without limitation, the following:
decline in demand for Toyota and Lexus products; the effect of economic
conditions; a decline in the market acceptability of leasing; the effect of
competitive pricing on interest margins; increases in prevailing interest
rates; changes in pricing due to the appreciation of the Japanese yen against
the United States dollar; the effect of governmental actions; the effect of
competitive pressures on the used car market and residual values; the
continuation of, and if continued, the level and type of special programs
offered by TMS; the ability of the Company to successfully access the United
States and international capital markets; the failure of the Company's action
plan to resolve timely year 2000 issues due to non-performance by outside
contractors or other factors; increased costs associated with the Company's
debt funding efforts; with respect to the effects of litigation matters, the
discovery of facts not presently known to the Company or determination by
judges, juries or other finders of fact which do not accord with the Company's
evaluation of the possible liability from existing litigation; and the ability
of the Company's counterparties to perform under interest rate and cross
currency swap agreements. Results actually achieved thus may differ
materially from expected results included in these statements.
New Accounting Standards
In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130, "Reporting Comprehensive Income", effective for fiscal years
beginning after December 15, 1997. SFAS No. 130 requires that all components
of comprehensive income be reported in a financial statement that is displayed
with the same prominence as other financial statements as well as separate
disclosure of other components of comprehensive income in the equity section
of the balance sheet. The Company has not determined the impact that adoption
of this standard will have on its consolidated financial statement
disclosures. The Company plans to adopt this accounting standard by
October 1, 1998, as required.
In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information", effective for fiscal years beginning
after December 15, 1997. SFAS No. 131 establishes standards for reporting
information about operating segments in annual financial statements and
requires selected information about operating segments in interim financial
reports. It also establishes standards for related disclosures about products
and services, major customers and geographic areas. The Company has not
determined the impact that adoption of this standard will have on its
consolidated financial statement disclosures. The Company plans to adopt this
accounting standard by October 1, 1998, as required.
-22-
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
INDEX TO FINANCIAL STATEMENTS
Page
-------
Report of Independent Accountants................................ 24
Consolidated Balance Sheet at September 30, 1997 and 1996........ 25
Consolidated Statement of Income for the
years ended September 30, 1997, 1996 and 1995................. 26
Consolidated Statement of Shareholder's Equity for
the years ended September 30, 1997, 1996 and 1995............. 27
Consolidated Statement of Cash Flows for the
years ended September 30, 1997, 1996 and 1995................. 28
Notes to Consolidated Financial Statements....................... 29-55
All schedules have been omitted because they are not required, not applicable,
or the information has been included elsewhere.
-23-
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Board of Directors and Shareholder of
Toyota Motor Credit Corporation
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of shareholder's equity and of cash flows
present fairly, in all material respects, the financial position of Toyota
Motor Credit Corporation (a wholly-owned subsidiary of Toyota Motor Sales,
U.S.A., Inc.) and its subsidiaries at September 30, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years
in the period ended September 30, 1997, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
Toyota Motor Credit Corporation's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted
our audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for the opinion expressed above.
/S/ PRICE WATERHOUSE LLP
Los Angeles, California
October 31, 1997
-24-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
CONSOLIDATED BALANCE SHEET
(Dollars in Millions)
<TABLE>
<CAPTION>
September 30,
-----------------------
1997 1996
-------- --------
<S> <C> <C>
ASSETS
------
Cash and cash equivalents................. $ 177 $ 170
Investments in marketable securities...... 305 355
Investments in operating leases, net...... 10,257 10,831
Finance receivables, net.................. 8,452 7,474
Receivable from Parent.................... 112 78
Other receivables......................... 137 164
Deferred charges.......................... 164 131
Other assets.............................. 183 106
Income taxes receivable................... 43 -
------- -------
Total Assets..................... $19,830 $19,309
======= =======
LIABILITIES AND SHAREHOLDER'S EQUITY
------------------------------------
Notes and loans payable................... $14,745 $15,014
Accrued interest.......................... 213 226
Accounts payable and accrued expenses..... 1,072 474
Deposits.................................. 248 248
Income taxes payable...................... - 16
Deferred income........................... 517 612
Deferred income taxes..................... 954 805
------- -------
Total Liabilities................... 17,749 17,395
------- -------
Commitments and Contingencies
Shareholder's Equity:
Capital stock, $l0,000 par value
(100,000 shares authorized; issued
and outstanding 91,500 in 1997 and
1996)............................... 915 915
Retained earnings...................... 1,159 997
Net unrealized gains on marketable
securities.......................... 7 2
------- -------
Total Shareholder's Equity.......... 2,081 1,914
------- -------
Total Liabilities and
Shareholder's Equity............. $19,830 $19,309
======= =======
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-25-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Dollars in Millions)
<TABLE>
<CAPTION>
Years ended September 30,
----------------------------
1997 1996 1995
------ ------ ------
<S> <C> <C> <C>
Financing Revenues:
Leasing................................. $2,739 $2,454 $1,902
Retail financing........................ 446 415 431
Wholesale and other dealer financing.... 89 109 121
------ ------ ------
Total financing revenues................... 3,274 2,978 2,454
Depreciation on leases.................. 1,790 1,626 1,230
Interest expense........................ 918 820 716
------ ------ ------
Net financing revenues..................... 566 532 508
Other revenues............................. 176 136 113
------ ------ ------
Net financing revenues and other revenues.. 742 668 621
------ ------ ------
Expenses:
Operating and administrative............ 323 293 255
Provision for credit losses............. 136 115 66
------ ------ ------
Total expenses............................. 459 408 321
------ ------ ------
Income before income taxes................. 283 260 300
Provision for income taxes................. 121 108 117
------ ------ ------
Net Income................................. $ 162 $ 152 $ 183
====== ====== ======
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-26-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDER'S EQUITY
(Dollars in Millions)
<TABLE>
<CAPTION>
Net
Capital Retained Unrealized
Stock Earnings Gain/(Loss) Total
------- -------- ---------- -------
<S> <C> <C> <C> <C>
Balance at September 30, l994... $ 865 $ 662 $ - $1,527
Net income in 1995.............. - 183 - 183
Change in net unrealized gain
on available-for-sale
marketable securities........ - - (1) (1)
------ -------- --------- -------
Balance at September 30, 1995... 865 845 (1) 1,709
Issuance of capital stock....... 50 - - 50
Net income in 1996.............. - 152 - 152
Change in net unrealized gain
on available-for-sale
marketable securities........ - - 3 3
------ ------- --------- -------
Balance at September 30, 1996... 915 997 2 1,914
Net income in 1997.............. - 162 - 162
Change in net unrealized gain
on available-for-sale
marketable securities........ - - 5 5
------ ------- --------- -------
Balance at September 30, 1997... $ 915 $1,159 $ 7 $2,081
====== ====== ========= =======
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-27-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Millions)
<TABLE>
<CAPTION>
Years ended September 30,
---------------------------------
1997 1996 1995
------ ------ ------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income.......................................... $ 162 $ 152 $ 183
------ ------ ------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization.................. 1,835 1,646 1,286
Provision for credit losses.................... 136 115 66
Gain from sale of finance receivables, net..... (23) (15) (11)
(Decrease) increase in accrued interest........ (13) 36 34
Increase in deferred income taxes.............. 149 178 241
(Increase) decrease in other assets............ (198) (59) 114
(Decrease) increase in other liabilities....... (74) 220 99
------ ------ ------
Total adjustments................................... 1,812 2,121 1,829
------ ------ ------
Net cash provided by operating activities.............. 1,974 2,273 2,012
------ ------ ------
Cash flows from investing activities:
Addition to investments in marketable
securities....................................... (581) (222) (116)
Disposition of investments in marketable
securities....................................... 638 68 33
Addition to investments in operating leases......... (4,269) (6,081) (4,123)
Disposition of investments in operating leases...... 3,044 1,718 927
Purchase of finance receivables..................... (15,595) (13,136) (11,005)
Liquidation of finance receivables.................. 12,553 11,938 10,913
Proceeds from sale of finance receivables........... 1,956 905 650
------ ------ ------
Net cash used in investing activities.................. (2,254) (4,810) (2,721)
------ ------ ------
Cash flows from financing activities:
Proceeds from issuance of capital stock............. - 50 -
Proceeds from issuance of notes and loans payable... 5,482 5,894 5,733
Payments on notes and loans payable................. (4,510) (4,587) (4,989)
Net (decrease) increase in commercial paper,
with original maturities less than 90 days....... (685) 1,249 (62)
------ ------ ------
Net cash provided by financing activities.............. 287 2,606 682
------ ------ ------
Net increase (decrease) in cash and cash equivalents... 7 69 (27)
Cash and cash equivalents at the beginning
of the period....................................... 170 101 128
------ ------ ------
Cash and cash equivalents at the end of the
period.............................................. $ 177 $ 170 $ 101
====== ====== ======
Supplemental disclosures:
Interest paid....................................... $906 $778 $643
Income taxes paid................................... $5 $3 $2
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
-28-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Nature of Operations
- -----------------------------
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) and Puerto Rico. TMCC is a
wholly-owned subsidiary of Toyota Motor Sales, U.S.A., Inc. ("TMS" or the
"Parent"). TMS is primarily engaged in the wholesale distribution of
automobiles, trucks, industrial equipment and related replacement parts and
accessories throughout the United States (excluding Hawaii). Substantially
all of TMS's products are purchased from Toyota Motor Corporation ("TMC") or
its affiliates. TMC restructured its North American organizations with the
establishment of Toyota Motor Manufacturing North America, Inc. ("TMMNA") on
October 1, 1996. TMMNA functions to coordinate and support numerous
manufacturing related administrative functions previously carried out
independently by various Toyota entities in North America and by TMC in Japan.
Both TMMNA and TMS are wholly-owned subsidiaries of Toyota Motor North
America, Inc., a holding company owned 100% by TMC.
TMCC has seven wholly-owned subsidiaries, Toyota Motor Insurance Services,
Inc. ("TMIS"), Toyota Motor Insurance Corporation of Vermont ("TMICV"), Toyota
Motor Insurance Company ("TMIC"), Toyota Motor Life Insurance Company
("TLIC"), Toyota Motor Credit Receivables Corporation ("TMCRC"), Toyota
Leasing, Inc. ("TLI") and Toyota Credit De Puerto Rico Corp. ("TCPR"). TMCC
and its wholly-owned subsidiaries are collectively referred to as the
"Company". The insurance subsidiaries provide certain insurance services
along with certain insurance and contractual coverages in connection with the
sale and lease of vehicles. In addition, the insurance subsidiaries insure
and reinsure certain TMS and TMCC risks. TMCRC, a limited purpose subsidiary,
operates primarily to acquire retail finance receivables from TMCC for the
purpose of securitizing such receivables. TLI, a limited purpose subsidiary,
was formed in April 1997 primarily to acquire lease finance receivables from
TMCC for the purpose of securitizing such leases. TCPR was established in
January 1996 to provide retail and wholesale financing and certain other
financial services to authorized Toyota and Lexus vehicle dealers and their
customers in Puerto Rico; TCPR commenced operations in October 1996.
The Company's business is substantially dependent upon the sale of Toyota and
Lexus vehicles in the United States. Changes in the volume of sales of such
vehicles resulting from governmental action, changes in consumer demand,
changes in pricing of imported units due to currency fluctuations, or other
events could impact the level of finance and insurance operations of the
Company.
-29-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - Summary of Significant Accounting Policies
- ---------------------------------------------------
Use of Estimates
----------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of TMCC and its
wholly-owned subsidiaries. All significant intercompany transactions and
balances have been eliminated.
Revenue Recognition
-------------------
Revenue from retail financing contracts and finance leases is recognized using
the effective yield method. Revenue from operating leases is recognized on a
straight-line basis over the lease term.
Cash and Cash Equivalents
-------------------------
Cash equivalents, consisting primarily of money market instruments and debt
securities, represent highly liquid investments with original maturities of
three months or less.
Investments in Marketable Securities
------------------------------------
Investments in marketable securities consist of debt and equity securities.
Debt securities designated as held-to-maturity are carried at amortized cost
and are reduced to net realizable value for other than temporary declines in
market value. Debt and equity securities designated as available-for-sale are
carried at fair value with unrealized gains or losses included in
shareholder's equity, net of applicable taxes. Realized investment gains and
losses, which are determined on the specific identification method, are
reflected in income.
-30-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - Summary of Significant Accounting Policies (Continued)
- ---------------------------------------------------
Investments in Operating Leases
-------------------------------
TMCC acquires retail leases from Toyota and Lexus vehicle and Toyota
industrial equipment dealers. Investments in operating leases are recorded at
cost and depreciated, primarily on a straight-line basis, over the lease term
to the estimated residual value. Gains or losses on disposal and adjustments
to the residual value of underlying assets are also included in depreciation
expense.
Allowance for Credit Losses
---------------------------
Allowances for credit losses are established during the period in which
receivables are acquired and are maintained in amounts considered by
management to be appropriate in relation to receivables outstanding based upon
historical loss experience and other factors. Losses are charged to the
allowance for credit losses when it has been determined that collateral cannot
be recovered and any shortfall between proceeds received and the carrying cost
of repossessed collateral is charged to the allowance. Recoveries are
credited to the allowance for credit losses.
Allowance for Residual Value Losses
-----------------------------------
Allowances for estimated losses on lease vehicles returned to TMCC for
disposition at lease termination are established based upon projected vehicle
return rates and projected residual value losses on core models derived from
available historical and market information as well as general economic
factors. The provision for residual value losses is included in depreciation
expense for operating leases and in leasing revenues for direct finance
leases. Effective January 1997, and at each subsequent quarter end, TMCC
reevaluated amounts provided for its allowance for estimated residual value
losses based on recent vehicle return rates and loss experience which resulted
in increased depreciation expense of $9.7 million and decreased leasing
revenues of $2.4 million for a combined decrease in net financing revenues of
$12.1 million for the nine months ended September 30, 1997.
Deferred Charges
----------------
Deferred charges consist primarily of premiums paid for option-based products,
underwriters' commissions and other debt issuance costs which are amortized
to interest expense over the life of the related instruments on a straight-
line basis.
-31-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - Summary of Significant Accounting Policies (Continued)
- ---------------------------------------------------
Insurance Operations
--------------------
Revenues from insurance premiums and from providing coverage under various
contractual agreements are earned over the terms of the respective policies
and agreements in proportion to estimated claims activity. Certain costs of
acquiring new business, consisting primarily of commissions and premium taxes,
are deferred and amortized over the terms of the related policies on the same
basis as revenues are earned. The liability for reported losses and the
estimate of unreported losses are recorded in accounts payable and accrued
expenses. Commission and fee income are recognized in relation to the level
of services performed.
Derivative Financial Instruments
--------------------------------
TMCC uses a variety of derivative financial instruments to manage funding
costs and risks associated with changes in interest and foreign currency
exchange rates. The derivative instruments used include interest rate, cross
currency interest rate and indexed note swap agreements and option-based
products. TMCC does not use any of these instruments for trading purposes.
The derivative financial instruments are specifically designated to the
underlying debt obligations or to portfolio level risks. Cash flows related
to these instruments are classified in the same categories as cash flows from
related borrowing activities.
Interest Rate Swap Agreements
-----------------------------
Interest rate swap agreements are executed as an integral part of specific
debt transactions or on a portfolio basis. The differential paid or received
on interest rate swap agreements is recorded on an accrual basis as an
adjustment to interest expense over the term of the agreements.
Cross Currency Interest Rate Swap Agreements
--------------------------------------------
Cross currency interest rate swap agreements are executed as an integral part
of foreign currency debt transactions. The differential between the contract
rates and the foreign currency spot exchange rates as of the reporting dates
is classified in other receivables or accounts payable and accrued expenses;
the differential paid or received on the interest rate swap portion of the
agreements is recorded on an accrual basis as an adjustment to interest
expense over the term of the agreements.
Indexed Note Swap Agreements
----------------------------
Indexed note swap agreements are executed as an integral part of indexed note
transactions. Any differential between contract rates and foreign currency
spot exchange rates as of the reporting dates is classified in other
receivables or accounts payable and accrued expenses; the interest
differential paid or received on indexed note swap agreements is recorded on
an accrual basis as an adjustment to interest expense over the term of the
agreements.
Option-Based Products
---------------------
Option-based products are executed on a portfolio basis. Premiums paid for
option-based products are included in deferred charges and are amortized to
interest expense over the life of the instruments on a straight-line basis.
Amounts receivable under option-based products are recorded on an accrual
basis as a reduction to interest expense.
-32-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 2 - Summary of Significant Accounting Policies (Continued)
- ---------------------------------------------------
Income Taxes
------------
TMCC uses the liability method of accounting for income taxes under which
deferred tax assets and liabilities are adjusted to reflect changes in tax
rates and laws in the period such changes are enacted resulting in adjustments
to the current period's provision for income taxes.
The Company joins with TMS in filing consolidated federal income tax returns
and combined or consolidated income tax returns in certain states. Federal
and state income tax expense is generally recognized as if the Company filed
its tax returns on a stand alone basis. In those states where TMCC joins in
the filing of consolidated or combined income tax returns, TMCC is allocated
its share of the total income tax expense based on the Company's income or
loss which would be allocable to such states if the Company filed separate
returns. Based on an informal tax sharing agreement with TMS and other
members of the TMS group, the Company pays TMS for its share of the
consolidated federal and consolidated or combined state income tax expense and
is reimbursed for the benefit of any of its tax basis losses utilized in the
consolidated federal and consolidated or combined state income tax returns.
Reclassifications
-----------------
Certain 1996 and 1995 amounts have been reclassified to conform with the 1997
presentation.
-33-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3 - Investments in Marketable Securities
- ---------------------------------------------
TMCC records its investments in marketable securities which are designated as
available-for-sale at fair value estimated using quoted market prices or
discounted cash flow analysis. Unrealized gains, net of income taxes, related
to available-for-sale securities are included as a separate component of
shareholder's equity. Securities designated as held-to-maturity are recorded
at amortized cost.
The estimated fair value and amortized cost of investments in marketable
securities are as follows:
<TABLE>
<CAPTION>
September 30, 1997
---------------------------
Gross
Fair Unrealized
Cost Value Gains
---- ----- ----------
(Dollars in Millions)
<S> <C> <C> <C>
Available-for-sale securities:
Equity securities................... $ 50 $ 58 $ 8
Asset-backed securities............. 161 164 3
U.S. debt securities................ 46 46 -
Corporate debt securities........... 21 21 -
---- ---- ---
Total available-for-sale securities.... $278 $289 $11
===
Held-to-maturity securities:
U.S. debt securities................ 16 16
---- ----
Total marketable securities............ $294 $305
==== ====
</TABLE>
<TABLE>
<CAPTION>
September 30, 1996
---------------------------
Gross
Fair Unrealized
Cost Value Gains
---- ----- ----------
(Dollars in Millions)
<S> <C> <C> <C>
Available-for-sale securities:
Equity securities................... $133 $135 $ 2
Asset-backed securities............. 206 207 1
U.S. debt securities................ 2 2 -
---- ---- ---
Total available-for-sale securities.... $341 $344 $ 3
===
Held-to-maturity securities:
U.S. debt securities................ 11 11
---- ----
Total marketable securities............ $352 $355
==== ====
</TABLE>
-34-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3 - Investments in Marketable Securities (Continued)
- ---------------------------------------------
The contractual maturities of investments in marketable securities at
September 30, 1997 are as follows:
<TABLE>
<CAPTION>
Available-for-Sale Held-to-Maturity
Securities Securities
------------------ ----------------
Fair Fair
Cost Value Cost Value
---- ----- ---- -----
(Dollars in Millions)
<S> <C> <C> <C> <C>
Within one year...................... $ - $ - $ 12 $ 12
After one year through five years.... 21 21 4 4
After five years through ten years... 29 29 - -
After ten years...................... 17 17 - -
Mutual funds......................... 50 58 - -
Asset-backed securities.............. 161 164 - -
---- ---- --- ---
Total............................. $278 $289 $ 16 $ 16
==== ==== ==== =====
</TABLE>
The proceeds from sales of available-for-sale securities were $416 million and
$3 million for the years ended September 30, 1997 and 1996, respectively.
Realized gains and losses on sales of available-for-sale securities were
$5 million and $2 million, respectively, for the year ended September 30,
1997, and were immaterial for the years ended September 30, 1996 and 1995.
-35-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 4 - Investments in Operating Leases
- ----------------------------------------
Investments in operating leases, net consisted of the following:
<TABLE>
<CAPTION>
September 30,
----------------------
1997 1996
------- -------
(Dollars in Millions)
<S> <C> <C>
Vehicles................................. $12,557 $13,252
Equipment and other...................... 338 268
------- -------
12,895 13,520
Accumulated depreciation................. (2,535) (2,582)
Allowance for credit losses.............. (103) (107)
------- -------
Investments in operating leases, net.. $10,257 $10,831
======= =======
</TABLE>
Rental income from operating leases was $2,568 million, $2,292 million and
$1,734 million for the years ended September 30, 1997, 1996 and 1995,
respectively. Future minimum rentals on operating leases for each of the five
succeeding years ending September 30, are: 1998 - $1,873 million; 1999 -
$1,114 million; 2000 - $366 million; 2001 - $42 million; and 2002 -
$4 million. A substantial portion of TMCC's operating lease contracts have
historically been terminated prior to maturity; future minimum rentals as
shown above should not be considered as necessarily indicative of future cash
collections.
Note 5 - Finance Receivables
- ----------------------------
Finance receivables, net consisted of the following:
<TABLE>
<CAPTION>
September 30,
---------------------
1997 1996
------ ------
(Dollars in Millions)
<S> <C> <C>
Retail............................... $6,315 $5,501
Finance leases....................... 1,938 1,536
Wholesale and other dealer loans..... 885 1,015
------ ------
9,138 8,052
Unearned income...................... (576) (482)
Allowance for credit losses.......... (110) (96)
------ ------
Finance receivables, net.......... $8,452 $7,474
====== ======
</TABLE>
-36-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 5 - Finance Receivables (Continued)
- ----------------------------
Contractual maturities are as follows:
<TABLE>
<CAPTION>
Due in the Wholesale
Years Ending and Other
September 30, Retail Dealer Loans
------------- ------ ------------
(Dollars in Millions)
<S> <C> <C>
1998.................. $1,907 $ 671
1999.................. 1,639 37
2000.................. 1,443 54
2001.................. 949 61
2002.................. 358 50
Thereafter............ 19 12
------ ------
Total.............. $6,315 $ 885
====== ======
</TABLE>
Finance leases, net consisted of the following:
<TABLE>
<CAPTION>
September 30,
---------------------
1997 1996
------ ------
(Dollars in Millions)
<S> <C> <C>
Minimum lease payments.................. $1,260 $ 878
Estimated unguaranteed residual values.. 678 658
------ ------
Finance leases....................... 1,938 1,536
Unearned income......................... (336) (270)
Allowance for credit losses............. (24) (19)
------ ------
Finance leases, net.................. $1,578 $1,247
====== ======
</TABLE>
The aggregate balances related to finance receivables 60 or more days past due
totaled $17 million and $20 million at September 30, 1997 and 1996,
respectively. Future minimum finance lease payments for each of the five
succeeding years ending September 30, are: 1998 - $374 million; 1999 -
$329 million; 2000 - $305 million; 2001 - $174 million and 2002 - $78 million.
A substantial portion of TMCC's finance receivables have historically been
repaid prior to contractual maturity dates; contractual maturities and future
minimum lease payments as shown above should not be considered as necessarily
indicative of future cash collections. The majority of retail and finance
lease receivables do not involve recourse to the dealer in the event of
customer default.
-37-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 6 - Allowance for Credit Losses
- ------------------------------------
An analysis of the allowance for credit losses follows:
<TABLE>
<CAPTION>
Years ended September 30,
--------------------------
1997 1996 1995
---- ---- ----
(Dollars in Millions)
<S> <C> <C> <C>
Allowance for credit losses
at beginning of period........... $203 $171 $164
Provision for credit losses......... 136 115 66
Charge-offs......................... (116) (81) (63)
Recoveries.......................... 12 12 12
Other adjustments................... (22) (14) (8)
---- ---- ----
Allowance for credit losses
at end of period................. $213 $203 $171
==== ==== ====
</TABLE>
Note 7 - Sale of Retail Receivables and Interests in Lease Finance Receivables
- ------------------------------------------------------------------------------
Effective January 1, 1997, TMCC adopted Statement of Financial Accounting
Standards ("SFAS") No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities." SFAS No. 125 addresses
the accounting for transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996 and the
accounting for and classification of previously recognized excess servicing
assets. In accordance with the requirements of this statement, the Company
has reclassified its previously recognized excess servicing receivables from
other receivables to investments in marketable securities for all balance
sheet periods presented.
In April 1997, and July 1996, TMCC sold retail finance receivables totaling
$784 million and $782 million, respectively, to TMCRC which in turn sold them
to a trust; TMCC continues to act as servicer and is paid a servicing fee.
TMCC holds an undivided trust interest ("UTI") in leases held in a titling
trust established by TMCC. In September 1997, TMCC identified certain leases
included in the UTI to be allocated to a separate portfolio represented by a
special unit of beneficial interest ("SUBI") totaling $1,283 million and sold
the SUBI to TLI. TLI in turn contributed substantially all of the SUBI to a
trust; TMCC continues to act as servicer for all assets represented by the UTI
and the SUBI and is paid a servicing fee. TMCRC and TLI retain subordinated
interests in the excess cash flows of these transactions, certain cash
deposits and other related amounts which are held as restricted assets subject
to limited recourse provisions. None of the retail finance receivables sold
to TMCRC, the lease assets represented by the SUBI or the restricted assets
are available to satisfy any obligations of TMCC.
-38-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 7 - Sale of Retail Receivables and Interests in Lease Finance Receivables
- ------------------------------------------------------------------------------
(Continued)
Following is a summary of amounts included in investment in marketable
securities and other receivables:
<TABLE>
<CAPTION>
September 30,
---------------------
1997 1996
---- ----
(Dollars in Millions)
<S>
Investment in marketable securities <C> <C>
Excess servicing.................... $ 77 $ 35
Allowance for estimated credit and
residual value losses on sold
receivables....................... (28) (5)
---- ----
Total........................... $ 49 $ 30
==== ====
Other receivables
Cash deposits....................... $ 51 $ 20
Undivided interest in trust......... 24 2
---- ----
Total........................... $ 75 $ 22
==== ====
</TABLE>
The pretax gain resulting from the sale of retail receivables and interests in
lease finance receivables totaled $23 million and $15 million in fiscal 1997
and 1996, respectively, after providing for an allowance for estimated credit
and residual value losses.
The outstanding balance of sold retail finance receivables which TMCC
continues to service at September 30, 1997 and 1996 totaled $1.1 billion for
both periods. The outstanding balance of the lease finance receivables
represented by the sold SUBI which TMCC continues to service at September 30,
1997 totaled $1.3 billion.
-39-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8 - Transactions with Parent
- ---------------------------------
An operating agreement with TMS (the "Operating Agreement") provides that 100%
ownership of TMCC will be retained by TMS as long as TMCC has any funded debt
outstanding and that TMS will provide necessary equity contributions or other
financial assistance it deems appropriate to ensure that TMCC maintains a
minimum coverage on fixed charges of 1.10 times such charges in any fiscal
quarter. The coverage provision of the Operating Agreement is solely for the
benefit of the holders of TMCC's commercial paper and the Operating Agreement
may be amended or terminated at any time without notice to, or the consent of,
holders of other TMCC obligations. The Operating Agreement does not
constitute a guarantee by TMS of any obligations of TMCC.
TMS provides certain technical and administrative services and incurs certain
expenses on the Company's behalf and, accordingly, allocates these charges to
the Company. The charges, reimbursed by TMCC to TMS, totaled $12 million,
$12 million and $8 million for the years ended September 30, 1997, 1996 and
1995, respectively. In addition, TMS sponsors special retail and lease
programs offered by TMCC; for the years ended September 30, 1997, 1996 and
1995, TMCC recognized revenue of $174 million, $174 million and $134 million,
respectively, related to TMS sponsored programs.
TMCC has an arrangement to borrow and invest funds with TMS at short term
market rates. For the years ended September 30, 1997 and 1996, TMCC did not
borrow from TMS. For the year ended September 30, 1995, the highest amount of
borrowings from TMS was $34 million; interest charges related to these
borrowings were immaterial. The Operating Agreement provides that borrowings
from TMS are subordinated to all other indebtedness of TMCC. For the years
ended September 30, 1997, 1996 and 1995, the highest amounts of funds invested
with TMS were $817 million, $224 million and $603 million, respectively;
interest earned on these investments totaled $5 million, $5 million and
$16 million for the years ended September 30, 1997, 1996 and 1995,
respectively.
The Company leases its headquarters facility from TMS; rent expense paid to
TMS for this facility totaled $3 million for each of the years ended
September 30, 1997, 1996 and 1995. TMCC leases a corporate aircraft to TMS
and provides wholesale financing for TMS affiliates; TMCC recognized revenue
related to these arrangements of $5 million, $3 million and $3 million for the
years ended September 30, 1997, 1996 and 1995, respectively.
TMIS and TMICV provide certain insurance services, and insurance and
reinsurance coverages, respectively, to TMS. Premiums, commissions and fees
earned on these services for the years ended September 30, 1997, 1996 and 1995
totaled $12 million, $7 million and $4 million, respectively.
-40-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 9 - Notes and Loans Payable
- --------------------------------
Notes and loans payable at September 30, 1997 and 1996, which consisted of
senior debt, included the following:
<TABLE>
<CAPTION>
September 30,
----------------------
1997 1996
------- -------
(Dollars in Millions)
<S> <C> <C>
Commercial paper, net................... $1,512 $ 2,360
------- -------
Other senior debt, due in the years
ending September 30,:
1997.............................. - 3,211
1998.............................. 2,868 2,760
1999.............................. 1,324 1,384
2000.............................. 2,505 2,137
2001.............................. 2,154 2,216
2002.............................. 2,660 491
Thereafter........................ 1,606 373
------- -------
13,117 12,572
Unamortized premium..................... 116 82
------- -------
Total other senior debt........... 13,233 12,654
------- -------
Notes and loans payable........ $14,745 $15,014
======= =======
</TABLE>
Short-term borrowings include commercial paper and certain medium-term notes
("MTNs"). The weighted average remaining term of commercial paper was 23 days
and 31 days at September 30, 1997 and 1996, respectively. The weighted
average interest rate on commercial paper was 5.58% and 5.41% at September 30,
1997 and 1996, respectively. Short-term MTNs with original terms of one year
or less, included in other senior debt, were $221 million and $559 million at
September 30, 1997 and 1996, respectively. The weighted average interest rate
on these short-term MTNs was 5.46% and 5.19% at September 30, 1997 and 1996,
respectively, including the effect of interest rate swap agreements.
The weighted average interest rate on other senior debt was 5.85% and 5.98% at
September 30, 1997 and 1996, respectively, including the effect of interest
rate swap agreements and option-based products. The rates have been calculated
using rates in effect at September 30, 1997 and 1996, some of which are
floating rates that reset daily. Approximately 8% of other senior debt at
September 30, 1997 had interest rates, including the effect of interest rate
swap agreements, that were fixed for a period of more than one year. The
weighted average of these fixed interest rates was 5.89% at September 30,
1997. Approximately 40% of other senior debt at September 30, 1997 had
floating interest rates that were covered by option-based products. The
weighted average strike rate on these option-based products was 6.02% at
September 30, 1997. TMCC manages interest rate risk via continuous adjustment
of the mix of fixed and floating rate debt through use of interest rate swap
agreements and option-based products.
-41-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 9 - Notes and Loans Payable (Continued)
- --------------------------------
Included in notes and loans payable at September 30, 1997 and 1996 were
unsecured notes denominated in various foreign currencies as follows:
<TABLE>
<CAPTION>
September 30,
------------------------------
1997 1996
----------- -----------
(Amounts in Millions)
<S> <C> <C>
Australian dollar................... 250 250
British pound sterling.............. 150 150
Canadian dollar..................... 300 300
Czech koruna........................ 2,000 -
Danish kroner....................... 400 -
Dutch guilder....................... 500 555
French franc........................ 1,545 2,545
German deutsche mark................ 2,772 1,052
Hong Kong dollar.................... 150 150
Italian lire........................ 927,300 493,300
Japanese yen........................ 187,502 197,699
Luxembourg franc.................... 2,000 -
New Zealand dollar.................. 200 100
South African rand.................. 400 250
Swedish kronor...................... 670 670
Swiss franc......................... 1,950 1,940
</TABLE>
Concurrent with the issuance of these unsecured notes, TMCC entered into cross
currency interest rate swap agreements to convert these obligations at
maturity into U.S. dollar obligations which in aggregate total a principal
amount of $6.8 billion at September 30, 1997. TMCC's foreign currency debt
was translated into U.S. dollars in the financial statements at the various
foreign currency spot exchange rates in effect at September 30, 1997. The
receivables or payables arising as a result of the differences between the
September 30, 1997 foreign currency spot exchange rates and the contract rates
applicable to the cross currency interest rate swap agreements are classified
in other receivables or accounts payable and accrued expenses, respectively,
and would in aggregate total a net payable position of $791 million at
September 30, 1997.
-42-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10 - Fair Value of Financial Instruments
- ---------------------------------------------
The fair value of financial instruments at September 30, 1997 and 1996, was
estimated using the valuation methodologies described below. Considerable
judgement was employed in interpreting market data to develop estimates of
fair value; accordingly, the estimates presented herein are not necessarily
indicative of the amounts that the Company could realize in a current market
exchange. The use of different market assumptions or valuation methodologies
could have a material effect on the estimated fair value amounts.
The carrying amounts and estimated fair values of the Company's financial
instruments at September 30, 1997 and 1996 are as follows:
<TABLE>
<CAPTION>
September 30,
---------------------------------------------------
1997 1996
------------------------ ------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
----------- ---------- ----------- ----------
(Dollars in Millions)
<S> <C> <C> <C> <C>
Balance sheet financial
instruments:
Assets:
Cash and cash equivalents........... $177 $177 $170 $170
Investments in marketable
securities....................... $305 $305 $355 $355
Retail finance receivables, net..... $6,875 $6,724 $6,228 $6,121
Other receivables................... $121 $121 $48 $49
Receivables from cross currency
interest rate swap agreements.... $10 $20 $116 $152
Liabilities:
Notes and loans payable............. $14,745 $15,290 $15,014 $15,398
Payables from cross currency
interest rate swap agreements.... $801 $543 $287 $108
Other payables...................... $271 $271 $187 $187
</TABLE>
-43-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10 - Fair Value of Financial Instruments (Continued)
- ---------------------------------------------
<TABLE>
<CAPTION>
September 30,
-------------------------------------------------
1997 1996
----------------------- ------------------------
Contract or Unrealized Contract or Unrealized
Notional Gains/ Notional Gains/
Amount (Losses) Amount (Losses)
----------- ---------- ----------- ----------
(Dollars in Millions)
<S> <C> <C> <C> <C>
Off-balance sheet
financial instruments:
Cross currency interest
rate swap agreements..... $6,534 $(491) $5,642 $72
Interest rate swap
agreements............... $6,318 $127 $6,759 $37
Option-based products....... $5,600 $16 $6,220 $26
Indexed note swap
agreements............... $2,340 $(1) $1,924 $(37)
</TABLE>
The fair value estimates presented herein are based on information available
to management as of September 30, 1997 and 1996. Although the Company is not
aware of any factors that would significantly affect the estimated fair value
amounts, such amounts have not been comprehensively reevaluated for purposes
of these financial statements since September 30, 1997 and 1996 and,
therefore, current estimates of fair value may differ significantly from the
amounts presented herein.
The methods and assumptions used to estimate the fair value of financial
instruments are summarized as follows:
Cash and Cash Equivalents
-------------------------
The carrying amount of cash and cash equivalents approximates market value due
to the short maturity of these investments.
Investments in Marketable Securities
------------------------------------
The fair value of marketable securities was estimated using quoted market
prices or discounted cash flow analysis.
Retail Finance Receivables
--------------------------
The carrying amounts of $800 million and $900 million of variable rate finance
receivables at September 30, 1997 and 1996, respectively, were assumed to
approximate fair value as these receivables reprice at prevailing market
rates. The fair value of fixed rate finance receivables was estimated by
discounting expected cash flows using the rates at which loans of similar
credit quality and maturity would be originated as of September 30, 1997 and
1996.
-44-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10 - Fair Value of Financial Instruments (Continued)
- ---------------------------------------------
Other Receivables and Other Payables
------------------------------------
The carrying amount and fair value of other receivables and other payables are
presented separately from the receivables and payables arising from cross
currency interest rate swap agreements. The fair value of amounts associated
with the sale of finance receivables was estimated by discounting expected
cash flows using quoted market interest rates as of September 30, 1997 and
1996. The carrying amount of the remaining other receivables and payables
approximate market value due to the short maturity of these instruments.
Notes and Loans Payable
-----------------------
The fair value of notes and loans payable was estimated by discounting
expected cash flows using the interest rates at which debt of similar credit
quality and maturity would be issued as of September 30, 1997 and 1996. The
carrying amount of commercial paper was assumed to approximate fair value due
to the short maturity of these instruments.
Cross Currency Interest Rate Swap Agreements
--------------------------------------------
The estimated fair value of TMCC's outstanding cross currency interest rate
swap agreements was derived by discounting expected cash flows using quoted
market exchange rates and quoted market interest rates as of September 30,
1997 and 1996.
Interest Rate Swap Agreements
-----------------------------
The estimated fair value of TMCC's outstanding interest rate swap agreements
was derived by discounting expected cash flows using quoted market interest
rates as of September 30, 1997 and 1996.
Option-based Products
-----------------------
The estimated fair value of TMCC's outstanding option-based products was
derived by discounting expected cash flows using market exchange rates and
market interest rates as of September 30, 1997 and 1996.
Indexed Note Swap Agreements
----------------------------
The estimated fair value of TMCC's outstanding indexed note swap agreements
was derived using quoted market prices as of September 30, 1997 and 1996.
-45-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 11 - Financial Instruments with Off-Balance Sheet Risk
- -----------------------------------------------------------
Inventory Lines of Credit
- -------------------------
TMCC has extended inventory floorplan lines of credit to dealers, the unused
portion of which amounted to $1,163 million and $1,119 million at
September 30, 1997 and 1996, respectively. Security interests are acquired in
vehicles and equipment financed and substantially all such financings are
backed by corporate or individual guarantees from or on behalf of the
participating dealers.
Derivative Financial Instruments
- --------------------------------
TMCC utilizes a variety of derivative financial instruments to manage its
currency exchange rate risk arising as a result of borrowings denominated in
foreign currencies and its interest rate risk as explained in this note. TMCC
does not enter into these arrangements for trading purposes.
A reconciliation of the activity of TMCC's derivative financial instruments
for the years ended September 30, 1997 and 1996 is as follows:
<TABLE>
<CAPTION>
September 30,
----------------------------------------------------------------
Cross
Currency
Interest Interest Indexed
Rate Swap Rate Swap Option-based Note Swap
Agreements Agreements Products Agreements
------------ ------------ ------------- ------------
1997 1996 1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ---- ---- ----
(Dollars in Billions)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Beginning Notional Amount... $5.6 $4.8 $6.8 $7.1 $6.2 $3.8 $1.9 $1.7
Add:
New agreements........... 2.0 1.7 2.0 3.1 2.6 3.4 1.0 1.2
Less:
Expired agreements....... 1.1 0.9 2.5 3.4 3.2 1.0 0.5 1.0
---- ---- ---- ---- ---- ---- ---- ----
Ending Notional Amount...... $6.5 $5.6 $6.3 $6.8 $5.6 $6.2 $2.4 $1.9
==== ==== ==== ==== ==== ==== ==== ====
</TABLE>
-46-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 11 - Financial Instruments with Off-Balance Sheet Risk (Continued)
- -----------------------------------------------------------
Interest Rate Risk Management
- -----------------------------
TMCC utilizes interest rate swap agreements in managing its exposure to
interest rate fluctuations. Interest rate swap agreements are executed as an
integral part of specific debt transactions or on a portfolio basis. TMCC's
interest rate swap agreements involve agreements to pay fixed and receive a
floating rate, or receive fixed and pay a floating rate, at specified
intervals, calculated on an agreed-upon notional amount. Interest rate swap
agreements may also involve basis swap contracts which are agreements to
exchange the difference between certain floating interest amounts, such as the
net payment based on the commercial paper rate and the London Interbank
Offered Rate ("LIBOR"), calculated on an agreed-upon notional amount. The
original maturities of interest rate swap agreements ranged from one to seven
years at September 30, 1997.
TMCC also utilizes option-based products in managing its exposure to interest
rate fluctuations. Option-based products are executed on a portfolio basis
and consist primarily of purchased interest rate cap agreements. Option-based
products are agreements which either grant TMCC the right to receive or
require TMCC to make payments at specified interest rate levels.
Approximately 40% of TMCC's other senior debt at September 30, 1997 had
floating interest rates that were covered by option-based products which had
an average strike rate of 6.02%. The premiums paid for option-based products
are included in deferred charges and are amortized to interest expense over
the life of the instruments on a straight-line basis. Amounts receivable
under option-based products are recorded as a reduction to interest expense.
The original maturities of option-based products ranged from two to three
years at September 30, 1997.
The aggregate notional amounts of interest rate swap agreements and option-
based products outstanding at September 30, 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
September 30,
---------------------
1997 1996
---- ----
(Dollars in Billions)
<S> <C> <C>
Fixed rate swaps............................... $1.5 $2.3
Floating rate swaps............................ 4.1 3.1
Basis swaps.................................... 0.7 1.4
---- ----
Total interest rate swap agreements........ $6.3 $6.8
==== ====
Option-based products.......................... $5.6 $6.2
==== ====
</TABLE>
-47-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 11 - Financial Instruments with Off-Balance Sheet Risk (Continued)
- -----------------------------------------------------------
Interest Rate Risk Management (Continued)
- -----------------------------
TMCC utilizes indexed note swap agreements in managing its exposure in
connection with debt instruments whose interest rate and/or principal
redemption amounts are derived from other underlying instruments. Indexed
note swap agreements involve agreements to receive interest and/or principal
amounts associated with the indexed notes, denominated in either U.S. dollars
or a foreign currency, and to pay fixed or floating rates on fixed U.S. dollar
liabilities. At September 30, 1997, TMCC was the counterparty to $2.4 billion
of indexed note swap agreements, of which $0.3 billion was denominated in
foreign currencies and $2.1 billion was denominated in U.S. dollars. At
September 30, 1996, TMCC was the counterparty to $1.9 billion of indexed note
swap agreements, of which $0.6 billion was denominated in foreign currencies
and $1.3 billion was denominated in U.S. dollars. The original maturities of
indexed note swap agreements ranged from one to eleven years at September 30,
1997.
The notional amounts of interest rate and indexed note swap agreements and
option-based products do not represent amounts exchanged by the parties and,
thus, are not a measure of the Company's exposure through its use of
derivatives. The amounts exchanged are calculated based on the notional
amounts and other terms of the derivatives which relate to interest rates or
financial or other indexes.
Foreign Exchange Risk Management
- --------------------------------
TMCC utilizes cross currency interest rate swap agreements to manage exposure
to exchange rate fluctuations on principal and interest payments for
borrowings denominated in foreign currencies. Notes and loans payable issued
in foreign currencies are hedged by concurrently executed cross currency
interest rate swap agreements which involve the exchange of foreign currency
principal and interest obligations for U.S. dollar obligations at agreed-upon
currency exchange and interest rates. The aggregate notional amounts of cross
currency interest rate swap agreements at September 30, 1997 and 1996 were
$6.5 billion and $5.6 billion, respectively. The original maturities of cross
currency interest rate swap agreements ranged from one to seven years at
September 30, 1997.
-48-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 11 - Financial Instruments with Off-Balance Sheet Risk (Continued)
- -----------------------------------------------------------
Credit Risk Management
- ----------------------
TMCC manages the risk of counterparty default through the use of credit
standard guidelines, counterparty diversification and monitoring of
counterparty financial condition. At September 30, 1997, approximately 90% of
TMCC's derivative financial instruments, based on notional amounts, were with
commercial banks and investment banking firms assigned investment grade
ratings of "AA" or better by national rating agencies. TMCC does not
anticipate non-performance by any of its counterparties and has no reserves
related to non-performance as of September 30, 1997; TMCC has not experienced
any counterparty default during the three years ended September 30, 1997.
Additionally, TMCC's loss in the event of counterparty default is partially
mitigated as a result of master netting agreements in place with all
derivative counterparties which allow the net difference between TMCC and each
counterparty to be exchanged in the event of default.
Credit exposure of derivative financial instruments is represented by the fair
value of contracts with a positive fair value at September 30, 1997 reduced by
the effects of master netting agreements. The credit exposure of TMCC's
derivative financial instruments at September 30, 1997 was $39 million on an
aggregate notional amount of $20.8 billion.
-49-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 12 - Pension and Other Benefit Plans
- -----------------------------------------
All full-time employees of the Company are eligible to participate in the TMS
pension plan commencing on the first day of the month following hire.
Benefits payable under this non-contributory defined benefit pension plan are
based upon the employees' years of credited service and the highest sixty
consecutive months' compensation, reduced by a percentage of social security
benefits. For the years ended September 30, 1997, 1996 and 1995, the
Company's pension expense was $4 million, $4 million and $2 million,
respectively. At September 30, 1997, 1996 and 1995, the accumulated benefit
obligation and plan net assets for employees of the Company were not
determined separately from TMS; however, the plan's net assets available for
benefits exceeded the accumulated benefit obligation. TMS funding policy is
to contribute annually the maximum amount deductible for federal income tax
purposes.
Note 13 - Provision for Income Taxes
- ------------------------------------
The provision for income taxes consisted of the following:
<TABLE>
<CAPTION>
Years ended September 30,
--------------------------
1997 1996 1995
---- ---- ----
(Dollars in Millions)
<S> <C> <C> <C>
Current
Federal........................... $(14) $(47) $(97)
State............................. (14) (23) (27)
---- ---- ----
Total current ................. (28) (70) (124)
---- ---- ----
Deferred
Federal........................... 109 129 173
State............................. 40 49 68
---- ---- ----
Total deferred................. 149 178 241
---- ---- ----
Provision for income taxes.. $121 $108 $117
==== ==== ====
</TABLE>
-50-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 13 - Provision for Income Taxes (Continued)
- ------------------------------------
The deferred federal and state income tax liabilities are as follows:
<TABLE>
<CAPTION>
September 30,
---------------------
1997 1996
---- ----
(Dollars in Millions)
<S> <C> <C>
Federal........................................ $831 $643
State.......................................... 123 162
---- ----
Net deferred income tax liability........... $954 $805
==== ====
</TABLE>
The Company's deferred tax assets and liabilities consisted of the following:
<TABLE>
<CAPTION>
September 30,
---------------------
1997 1996
----- -----
(Dollars in Millions)
<S> <C> <C>
Assets:
Alternative minimum tax..................... $ 472 $ 436
Provision for losses........................ 148 116
Deferred administrative fees................ 63 54
NOL carryforwards........................... 56 49
Deferred acquisition costs.................. 8 12
Unearned insurance premiums................. 3 4
Revenue recognition......................... 3 2
Other....................................... - 3
----- -----
Deferred tax assets...................... 753 676
----- -----
Liabilities:
Lease transactions.......................... 1,511 1,330
State taxes................................. 190 151
Other....................................... 6 -
----- -----
Deferred tax liabilities................. 1,707 1,481
----- -----
Valuation allowance...................... - -
----- -----
Net deferred income tax liability..... $ 954 $ 805
===== =====
</TABLE>
TMCC has state tax net operating loss carryforwards of $756 million which
expire beginning in fiscal 1998 through 2010.
-51-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 13 - Provision for Income Taxes (Continued)
- ------------------------------------
A reconciliation between the provision for income taxes computed by applying
the federal statutory tax rate to income before income taxes and actual income
taxes provided is as follows:
<TABLE>
<CAPTION>
Years ended September 30,
-------------------------
1997 1996 1995
---- ---- ----
(Dollars in Millions)
<S> <C> <C> <C>
Provision for income taxes at
federal statutory tax rate......... $ 99 $ 91 $105
State and local taxes (net of
federal tax benefit)............... 17 17 26
Other, including changes in
applicable state tax rates......... 5 - (14)
---- ---- ----
Provision for income taxes......... $121 $108 $117
==== ==== ====
Effective tax rate.................... 42.69% 41.52% 39.12%
</TABLE>
Note 14 - Lines of Credit/Standby Letters of Credit
- ---------------------------------------------------
To support its commercial paper program, TMCC maintains syndicated bank credit
facilities with certain banks which aggregated $2.0 billion at
September 30, 1997 and 1996. No loans were outstanding under any of these bank
credit facilities as of September 30, 1997 or 1996.
To facilitate and maintain letters of credit, TMCC maintains, along with TMS,
uncommitted, unsecured lines of credit with banks totaling $250 million as of
September 30, 1997. Approximately $24 million in letters of credit had been
issued, primarily related to the Company's insurance operations as of
September 30, 1997, compared to $44 million as of September 30, 1996. The
letters of credit for the insurance companies are used to satisfy requirements
of certain insurance carriers and state insurance regulatory agencies.
-52-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 15 - Commitments and Contingent Liabilities
- ------------------------------------------------
At September 30, 1997, the Company was a lessee under lease agreements for
facilities with minimum future commitments as follows: years ending
September 30, 1998 - $9 million; 1999 - $7 million; 2000 - $4 million; 2001 -
$3 million; 2002 - $2 million; thereafter - $1 million.
TMCC has guaranteed payments of principal and interest on $58 million
principal amount of flexible rate demand pollution control revenue bonds
maturing in 2006, issued in connection with the Kentucky manufacturing
facility of an affiliate.
TMCC has guaranteed the obligations of TMIS relating to vehicle service
insurance agreements issued on or after July 1, 1997, in the Commonwealth of
Virginia. This guarantee has been given without regard to any security and
without any limitation as to duration or amount. TMCC has also guaranteed the
obligations of TMIS under an ISDA master agreement relating to swap
transactions and other financial instruments.
An operating agreement between TMCC and TCPR (the "Agreement"), provides that
TMCC will make necessary equity contributions or provide other financial
assistance TMCC deems appropriate to ensure that TCPR maintains a minimum
coverage on fixed charges of 1.10 times such fixed charges in any fiscal
quarter. The Agreement does not constitute a guarantee by TMCC of any
obligations of TCPR. The fixed charge coverage provision of the Agreement is
solely for the benefit of the holders of TCPR's commercial paper, and the
Agreement may be amended or terminated at any time without notice to, or the
consent of, holders of other TCPR obligations.
Various legal actions, governmental proceedings and other claims are pending
or may be instituted or asserted in the future against TMCC and its
subsidiaries with respect to matters arising from the ordinary course of
business. Certain of these actions are or purport to be class action suits,
seeking sizeable damages. Certain of these actions are similar to suits which
have been filed against other financial institutions and captive finance
companies. The amounts of liability on these claims and actions as of
September 30, 1997 were not determinable; however, in the opinion of
management, the ultimate liability resulting therefrom should not materially
affect TMCC's consolidated financial position or results of operations.
-53-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 16 - Segment Information
- -----------------------------
TMCC's business operations include primarily financing and insurance
activities. Following are gross revenues, income before taxes, assets and
other information applicable to financing and insurance operations:
<TABLE>
<CAPTION>
September 30,
---------------------------------
1997 1996 1995
--------- --------- ---------
(Dollars in Millions)
<S> <C> <C> <C>
Gross revenues:
Financing operations.................... $ 3,320 $ 3,004 $ 2,469
Insurance operations.................... 138 115 102
Eliminations (a)........................ (8) (5) (4)
--------- --------- ---------
Total gross revenues.................. $ 3,450 $ 3,114 $ 2,567
========= ========= =========
Income before income taxes:
Financing operations.................... $ 250 $ 241 $ 281
Insurance operations.................... 33 19 19
--------- --------- ---------
Total income before income taxes...... $ 283 $ 260 $ 300
========= ========= =========
Assets:
Financing operations.................... $ 19,519 $ 19,052 $ 15,990
Insurance operations.................... 334 275 253
Eliminations (b)........................ (23) (18) (18)
--------- --------- ---------
Total assets.......................... $ 19,830 $ 19,309 $ 16,225
========= ========= =========
Depreciation and amortization:
Financing operations.................... $ 1,834 $ 1,645 $ 1,285
Insurance operations.................... 1 1 1
--------- --------- ---------
Total depreciation and amortization... $ 1,835 $ 1,646 $ 1,286
========= ========= =========
Capital expenditures:
Financing operations.................... $ 14 $ 6 $ 5
Insurance operations.................... 1 1 -
--------- --------- ---------
Total capital expenditures............ $ 15 $ 7 $ 5
========= ========= =========
(a) Intersegment insurance tracking revenues.
(b) Primarily investment in insurance subsidiary.
</TABLE>
TMCC conducts substantially all of its business in the United States.
-54-
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 17 - Selected Quarterly Financial Data (Unaudited)
- -------------------------------------------------------
<TABLE>
<CAPTION>
Total
Financing Interest Depreciation Net
Revenues Expense on Leases Income
---------- -------- ------------ --------
(Dollars in Millions)
<S> <C> <C> <C> <C>
Year Ended September 30, 1997:
First quarter.............. $ 829 $227 $ 470 $ 38
Second quarter............. 829 225 446 47
Third quarter.............. 813 228 439 44
Fourth quarter............. 803 238 435 33
------ ---- ------ ----
Total................... $3,274 $918 $1,790 $162
====== ==== ====== ====
Year Ended September 30, 1996:
First quarter.............. $ 688 $193 $ 370 $ 41
Second quarter............. 724 196 394 36
Third quarter.............. 768 210 416 40
Fourth quarter............. 798 221 446 35
------ ---- ------ ----
Total................... $2,978 $820 $1,626 $152
====== ==== ====== ====
</TABLE>
-55-
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There is nothing to report with regard to this item.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The following table sets forth certain information regarding the directors and
executive officers of TMCC as of November 30, 1997.
Name Age Position
---- --- --------
Yoshio Ishizaka........... 57 Director and President, TMCC;
Director and President, TMS;
Director, TMC
Nobu Shigemi.............. 53 Director, Senior Vice President
and Treasurer, TMCC; Group Vice
President, TMS
George Borst ............. 49 Director, Senior Vice President
and General Manager, TMCC;
Senior Vice President, TMS
Robert Pitts.............. 49 Director and Secretary, TMCC;
Group Vice President, TMS
Yale Gieszl............... 55 Director, TMCC; Director and
Executive Vice President, TMS
Takashi Nishiyama......... 55 Director, TMCC; Senior Vice
President and Treasurer, TMS
Douglas West.............. 52 Director, TMCC; Senior Vice
President and Secretary, TMS
Ryuji Araki............... 57 Director, TMCC; Managing Director, TMC
All directors of TMCC are elected annually and hold office until their
successors are elected and qualified. Officers are elected annually and serve
at the pleasure of the Board of Directors.
Mr. Ishizaka was named Director and President of TMCC and TMS in June 1996.
From January 1990 to May 1996, Mr. Ishizaka was General Manager of the Europe
Division of TMC, and in September 1992, he was named a Director of TMC.
Mr. Ishizaka has been employed with TMC, in various positions, since 1964.
Mr. Shigemi was named Director, Senior Vice President and Treasurer of TMCC
and Group Vice President of TMS in September 1994. From January 1994 to
August 1994, Mr. Shigemi was General Manager of TMC's Finance Division. From
January 1993 to December 1993, he was the Project General Manager of the
Accounting Division of TMC. From February 1982 to December 1992, he worked in
the Tokyo Secretarial Division having been named a manager in February 1983
and Deputy General Manager in February 1990. Mr. Shigemi has been employed
with TMC, in various positions, since 1968.
Mr. Borst was named Director and Senior Vice President and General Manager of
TMCC in April 1997 and Senior Vice President of TMS in June 1997. From
January 1993 to May 1997, Mr. Borst was Group Vice President of TMS. From
April 1989 to December 1992, Mr. Borst was a Vice President of TMS. Mr. Borst
has been employed with TMS, in various positions, since 1985.
-56-
<PAGE>
Mr. Pitts was named Director of TMCC and Group Vice President of TMS in April
1993 and Secretary of TMCC in April 1997. From January 1984 to March 1993, he
was an executive with TMCC having been named General Manager in January 1984
and Vice President in April 1989. Mr. Pitts has been employed with TMS and
TMCC, in various positions, since 1971.
Mr. Gieszl was named Director of TMCC in September 1988. He is also a
Director and Executive Vice President of TMS, positions he has held since
December 1989 and June 1992, respectively. From January 1982 to May 1992, he
was a Senior Vice President of TMS. From October 1982 to May 1992, he held
the position of Senior Vice President of TMCC, and from September 1988 to May
1992, he also held the position of Secretary of TMCC. Mr. Gieszl has been
employed with TMS, in various positions, since 1970.
Mr. Nishiyama was named Director of TMCC and Senior Vice President and
Treasurer of TMS in January 1994. From February 1989 to December 1993, he was
General Manager of the Europe and Africa Project Division of TMC. From
February 1986 to January 1989, he was Executive Vice President of Salvador
Caetano S.A. Portugal. Mr. Nishiyama has been employed with TMC, in various
positions, since 1965.
Mr. West was named Director of TMCC and Senior Vice President and Secretary of
TMS in June 1996. From June 1996 to March 1997, Mr. West was also a Senior
Vice President and Secretary of TMCC. From April 1993 to May 1996, Mr. West
was a Group Vice President of TMS. From April 1989 to March 1993, Mr. West
was a Vice President of TMS. Mr. West has been employed with TMS, in various
positions, since 1982.
Mr. Araki was named Director of TMCC in September 1995. He was named Managing
Director of TMC's Board of Directors in June 1997 and has served on TMC's
Board of Directors since September 1992. Mr. Araki has been employed with
TMC, in various positions, since 1962.
-57-
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
Summary Compensation Table
The following table sets forth all compensation awarded to, earned by, or paid
to the Company's Principal Executive Officer and the most highly compensated
executive officers whose salary and bonus for the latest fiscal year exceeded
$100,000, for services rendered in all capacities to the Company for the
fiscal years ended September 30, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
Annual Compensation
--------------------------------------------
Other Annual All
Name and Fiscal Compensation Other
Principal Position Year Salary ($) Bonus ($) ($)<F1> ($)<F2>
- --------------------- ------ ---------- --------- ------------ -------
<S> <C> <C> <C> <C> <C>
George Borst 1997 $115,500 $56,700 - $3,300
Principal Executive 1996 N/A N/A N/A N/A
Officer <F3> 1995 N/A N/A N/A N/A
Wolfgang Jahn 1997 $119,460 $55,000 - $4,300
Principal Executive 1996 $233,100 $94,500 - $8,500
Officer <F3> 1995 $213,800 $98,700 - $6,000
Nobu Shigemi 1997 $415,500 $49,600 $44,000 -
Senior Vice President 1996 $316,000 $50,900 $51,700 -
1995 $199,000 $40,500 $47,300 -
<FN>
- ------------
<F1> The amounts in this column represent housing allowances and relocation
costs.
<F2> The amounts in this column represent the Company's allocated contribution
under the TMS Savings Plan (the "Plan"), a tax-qualified 401(k) Plan.
Participants in the Plan may elect, subject to applicable law, to contribute
up to 6% of their base compensation on a pre-tax basis to which the Company
adds an amount equal to two-thirds of the employee's contribution.
Participants are vested 25% each year with respect to the Company's
contribution and are fully vested after four years. Subject to the
limitations of the Plan, employee and Company contributions are invested in
various investment options at the discretion of the employee. TMS also
maintains a 401(k) Excess Plan, a non-qualified deferred compensation plan
which has similar provisions to the Saving Plan.
<F3> Mr. Jahn served as Principal Executive Officer during the current fiscal
year through March 1997. Effective April 1, 1997, Mr. Borst was appointed as
Principal Executive Officer in place of Mr. Jahn. The compensation presented
for Mr. Jahn and Mr. Borst reflect amounts earned for services to the Company
during the partial periods of the fiscal year each served as Principal
Executive Officer.
</FN>
</TABLE>
Employee Benefit Plan
The following pension plan table presents typical annual retirement benefits
under the TMS Pension Plan for various combinations of compensation and years
of credited service for participants who retire at age 62, assuming no final
average bonus and excluding Social Security offset amounts. The amounts are
subject to Federal statutory limitations governing pension calculations and
benefits.
-58-
<PAGE>
<TABLE>
<CAPTION>
Annual Benefits for
Final Average Years of Credited Service
Annual ------------------------------------
Compensation 15 20 25
------------- -------- -------- --------
<S> <C> <C> <C>
$50,000 $15,000 $20,000 $25,000
$100,000 $30,000 $40,000 $50,000
$150,000 $45,000 $60,000 $75,000
$200,000 $60,000 $80,000 $100,000
$250,000 $75,000 $100,000 $125,000
$300,000 $90,000 $120,000 $150,000
$350,000 $105,000 $140,000 $175,000
$400,000 $120,000 $160,000 $200,000
$450,000 $135,000 $180,000 $225,000
$500,000 $150,000 $200,000 $250,000
</TABLE>
All full-time employees of the Company are eligible to participate in the TMS
Pension Plan commencing on the first day of the month following hire.
Benefits payable under this non-contributory defined benefit pension plan are
based upon final average compensation, final average bonus and years of
credited service. Final average compensation is defined as the average of the
participant's base rate of pay, plus overtime, during the highest-paid 60
consecutive months prior to the earlier of termination or normal retirement.
Final average bonus is defined as the highest average of the participant's
fiscal year bonus, and basic seniority-based cash bonus for non-managerial
personnel, over a period of 60 consecutive months prior to the earlier of
termination or normal retirement. A participant generally becomes eligible
for the normal retirement benefit at age 62, and may be eligible for early
retirement benefits starting at age 55.
The annual normal retirement benefit under the Pension Plan, payable monthly,
is an amount equal to the number of years of credited service (up to 25 years)
multiplied by the sum of (i) 2% of the participant's final average
compensation less 2% of the estimated annual Social Security benefit payable
to the participant at normal retirement and (ii) 1% of the participant's final
average bonus. The normal retirement benefit is subject to reduction for
certain benefits under any union-sponsored retirement plan and benefits
attributable to employer contributions under any defined-contribution
retirement plan maintained by TMS and its subsidiaries or any affiliate that
has been merged into the TMS Pension Plan.
The TMS Supplemental Executive Retirement Plan (TMS SERP) authorizes a benefit
to be paid to eligible executives, including Mr. Borst and Mr. Jahn. Benefits
under the TMS SERP, expressed as an annuity payable monthly, are based on 2%
of the executive's compensation recognized under the plan after deducting the
executive's primary Social Security benefit, multiplied by the years of
service credited under the plan (up to a maximum of 25), offset by benefits
payable under the TMS Pension Plan. A covered participant's compensation may
include base pay and a percentage (not in excess of 100%) of bonus pay,
depending on the executive's length of service in certain executive positions.
Similarly, years of service credited under the plan are determined by
reference, in part, to the executive's length of service in certain executive
positions. No benefit is payable under the TMS SERP to an executive unless
the executive's termination of employment occurs on a date, after the
executive reaches age 55, that is agreed in writing by the President of TMS
and the executive; and the executive is vested in benefits under the TMS
Pension Plan, or unless the executive accepts an invitation to retire extended
by the President of TMS.
-59-
<PAGE>
Mr. Borst is a participant in the TMS Pension Plan and the TMS SERP and had
13 years of total credited service as of September 30, 1997, 6 months of which
have been allocated to the Company. Based upon years of credited service
allocable to the Company, Mr. Borst would be entitled to receive and the
Company would be required to pay approximately $2,000 in annual pension
benefits when Mr. Borst reaches age 62. Mr. Borst would also be entitled to
receive pension benefits from TMS based upon services to and compensation by
TMS.
Mr. Jahn is a participant in the TMS Pension Plan and the TMS SERP and had
24 years of total credited service as of September 30, 1997, 8 years of which
have been allocated to the Company. Based upon years of credited service
allocable to the Company, Mr. Jahn would be entitled to receive and the
Company would be required to pay approximately $34,000 in annual pension
benefits when Mr. Jahn reaches age 62. Mr. Jahn would also be entitled to
receive pension benefits from TMS based upon services to and compensation by
TMS.
Compensation of Directors
No amounts are paid to members of the TMCC Board of Directors for their
services as directors.
Compensation Committee Interlocks and Insider Participation
Members of the Executive Committee of the Board of Directors, which consists
of the directors of the Company other than Mr. Araki, participate in decisions
regarding the compensation of the executive officers of the Company. Certain
of the members of the Executive Committee are current or former executive
officers of the Company. Certain of the members of the Executive Committee
are also current executive officers and directors of TMS and its affiliates
and participate in compensation decisions for those entities.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
As of the date hereof, all of TMCC's capital stock is owned by TMS.
ITEM 13. CERTAIN RELATIONSHIPS AND TRANSACTIONS.
Transactions between the Company and its parent, TMS, are included in Note 2,
Note 8, and Note 15 of the Notes to the Consolidated Financial Statements.
Certain directors and executive officers of TMCC are also directors and
executive officers of TMS. In addition, see Item 1, Business - General, for a
description of certain obligations of TMMNA to TMCC.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a)(1)Financial Statements
Included in Part II, Item 8 of this Form 10-K. See Index to
Financial Statements on page 23.
(2)Exhibits
The exhibits listed on the accompanying Exhibit Index, starting on
page 62, are filed as part of, or incorporated by reference into,
this Report.
(b)Reports on Form 8-K
There were no reports on Form 8-K filed by the registrant during the
quarter ended September 30, 1997.
-60-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Torrance,
State of California, on the 22nd day of December, 1997.
TOYOTA MOTOR CREDIT CORPORATION
By /S/ GEORGE BORST
------------------------------
George Borst
Senior Vice President
and General Manager
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities indicated on the 22nd day of December, 1997.
Signature Title
--------- -----
Senior Vice President and General
Manager and Director
/S/ GEORGE BORST (Principal Executive Officer)
- ------------------------------------
George Borst
Senior Vice President/
Treasurer and Director
/S/ NOBU SHIGEMI (Principal Financial Officer)
- ------------------------------------
Nobu Shigemi
Vice President - Finance
and Administration
/S/ GREGORY WILLIS (Principal Accounting Officer)
- ------------------------------------
Gregory Willis
/S/ YOSHIO ISHIZAKA Director
- ------------------------------------
Yoshio Ishizaka
/S/ DOUGLAS WEST Director
- ------------------------------------
Douglas West
/S/ TAKASHI NISHIYAMA Director
- ------------------------------------
Takashi Nishiyama
-61-
<PAGE>
EXHIBIT INDEX
Method
Exhibit of
Number Description Filing
- ------- ----------- --------
3.1(a) Articles of Incorporation filed with the California
Secretary of State on October 4, 1982. (1)
3.1(b) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
January 24, 1984. (1)
3.1(c) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
January 25, 1985. (1)
3.1(d) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
September 6, 1985. (1)
3.1(e) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
February 28, 1986. (1)
3.1(f) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
December 3, 1986. (1)
3.1(g) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
March 9, 1987. (1)
3.1(h) Certificate of Amendment of Articles of Incorporation
filed with the California Secretary of State on
December 20, 1989. (2)
3.2 Bylaws as amended through January 16, 1993. (6)
4.1 Issuing and Paying Agency Agreement dated August 1,
1990 between TMCC and Bankers Trust Company. (3)
4.2(a) Indenture dated as of August 1, 1991 between TMCC and
The Chase Manhattan Bank, N.A. (4)
- -----------------
(1) Incorporated herein by reference to the same numbered Exhibit filed
with TMCC's Registration Statement on Form S-1, File No. 33-22440.
(2) Incorporated herein by reference to the same numbered Exhibit filed
with TMCC's Report on Form 10-K for the year ended September 30, 1989,
Commission File number 1-9961.
(3) Incorporated herein by reference to Exhibit 4.2 filed with TMCC's
Report on Form 10-K for the year ended September 30, 1990,
Commission File number 1-9961.
(4) Incorporated herein by reference to Exhibit 4.1(a), filed with TMCC's
Registration Statement on Form S-3, File No. 33-52359.
(6) Incorporated herein by reference to the same numbered Exhibit filed
with TMCC's Report on Form 10-K for the year ended September 30, 1993,
Commission File number 1-9961.
-62-
<PAGE>
EXHIBIT INDEX
Method
Exhibit of
Number Description Filing
- ------- ----------- ------
4.2(b) First Supplemental Indenture dated as of
October 1, 1991 among TMCC, Bankers Trust Company
and The Chase Manhattan Bank, N.A. (5)
4.3(a) Second Amended and Restated Agency Agreement dated Filed
July 24, 1997 among TMCC, The Chase Manhattan Bank Herewith
and Chase Manhattan Bank Luxembourg S.A.
4.4 TMCC has outstanding certain long-term debt as set
forth in Note 9 of the Notes to Consolidated Financial
Statements and certain demand notes issued under an
Indenture dated September 1, 1997. Not filed herein as
an exhibit, pursuant to Item 601(b) (4)-(iii)(A) of
Regulation S-K under the Securities Act of 1933, is any
instrument which defines the rights of holders of such
long-term debt or demand notes, where the total amount
of securities authorized thereunder does not exceed 10%
of the total assets of TMCC and its subsidiaries on a
consolidated basis. TMCC agrees to furnish copies of
all such instruments to the Securities and Exchange
Commission upon request.
10.1(a) Operating Agreement dated January 16, 1984 between
TMCC and TMS. (16)
10.1(b) Amendment No. 1 to Operating Agreement dated May 14, 1996
between TMCC and TMS. (11)
10.1(c) Amendment No. 2 to Operating Agreement dated December 1, Filed
1997 between TMCC, TMS and TMMNA Herewith
- -----------------
(5) Incorporated herein by reference to Exhibit 4.1 filed with TMCC's
Current Report on Form 8-K dated October 16, 1991, Commission File
No. 1-9961.
(11) Incorporated herein by reference to Exhibit 10.1 filed with TMCC's
Report on Form 10-Q for the quarter ended March 31, 1996, Commission
File No. 1-9961.
(16) Incorporated herein by reference to Exhibit 10.1 filed with TMCC's
Registration Statement on Form S-1, File No. 33-22440.
-63-
<PAGE>
EXHIBIT INDEX
Method
Exhibit of
Number Description Filing
- ------- ----------- ------
10.2 Pooling and Servicing Agreement among TMCRC,
as Seller, TMCC, as Servicer, and Bankers Trust Company,
as Trustee (including forms of Class A and Class B
Certificates) dated as of September 1, 1995. (7)
10.3 Receivables Purchase Agreement dated as of September 1,
1995 between TMCC, as Seller, and TMCRC Corporation,
as Purchaser. (8)
10.4 Form of Indemnification Agreement between TMCC and
its directors and officers. (12)
10.5(a) Three-year Credit Agreement (the "Three-year Agreement")
dated as of September 29, 1994 among TMCC, Morgan
Guaranty Trust Company of New York, as agent, and
Bank of America National Trust and Savings Association,
The Bank of Tokyo, Ltd., The Chase Manhattan Bank, N.A.,
Citicorp USA, Inc. and Credit Suisse, as Co-Agents.
Not filed herein as an exhibit, pursuant to Instruction 2
to Item 601 of Regulation S-K under the Securities Act of
1933, is the 364-day Credit Agreement (the "364-day
Agreement") among TMCC and the banks who are party to the
Three-year Agreement. Filed herewith is a
Schedule identifying the 364-day Agreement and setting
forth the material details in which the 364-day
Agreement differs from the Three-year Agreement. TMCC
agrees to furnish a copy of the 364-day Agreement to
the Securities and Exchange Commission upon request. (13)
10.5(b) Amendment No. 1 dated September 28, 1995 to the
Three-year Agreement. (14)
10.5(c) Amendment No. 1 dated September 28, 1995 to the
364-day Agreement. (15)
- ----------------
(7) Incorporated herein by reference to Exhibit 4.1 filed with Toyota Auto
Receivables 1995-A Grantor Trust's Current Report on Form 8-K dated
November 10, 1995, Commission File No. 33-96006.
(8) Incorporated herein by reference to Exhibit 10.1 filed with Toyota
Auto Receivables 1995-A Grantor Trust's Current Report on Form 8-K
dated November 10, 1995, Commission File No. 33-96006.
(12) Incorporated herein by reference to Exhibit 10.6 filed with TMCC's
Registration Statement on Form S-1, Commission File No. 33-22440.
(13) Incorporated herein by reference to Exhibit 10.10 filed with TMCC's
Report on Form 10-K for the year ended September 30, 1994,
Commission File No. 1-9961.
(14) Incorporated herein by reference to Exhibit 10.10(a) filed
with TMCC's Report on Form 10-K for the year ended September 30, 1995,
Commission File No. 1-9961.
(15) Incorporated herein by reference to Exhibit 10.10(b) filed with TMCC's
Report on Form 10-K for the year ended September 30, 1995, Commission
File No. 1-9961.
-64-
<PAGE>
EXHIBIT INDEX
Method
Exhibit of
Number Description Filing
- ------- ----------- ------
10.5(d) Amended and Restated Credit Agreement dated
September 24, 1996 to the Three-year Agreement. (17)
10.5(e) Amended and Restated Credit Agreement dated
September 24, 1996 to the 364-day Agreement. (18)
10.5(f) Amended and Restated Credit Agreement dated Filed
September 23, 1997 to the Three-year Agreement. Herewith
10.5(g) Amended and Restated Credit Agreement dated Filed
September 23, 1997 to the 364-day Agreement. Herewith
10.6 Toyota Motor Sales, U.S.A., Inc. Supplemental
Executive Retirement Plan. * (9)
10.7 Toyota Motor Sales, U.S.A., Inc. 401(k)
Excess Plan. * (10)
10.8 Amended and Restated Trust and Servicing Agreement
dated as of October 1, 1996 by and among TMCC,
TMTT, Inc., as titling trustee and U.S. Bank National
Association, as trust agent. (19)
12.1 Calculation of ratio of earnings to fixed charges. Filed
Herewith
21.1 TMCC's list of subsidiaries. Filed
Herewith
23.1 Consent of Independent Accountants. Filed
Herewith
27.1 Financial Data Schedule. Filed
Herewith
- ----------------
(9) Incorporated herein by reference to Exhibit 10.1 filed with TMCC's
Report on Form 10-Q for the quarter ended December 31, 1995, Commission
File No. 1-9961.
(10) Incorporated herein by reference to Exhibit 10.2 filed with TMCC's
Report on From 10-Q for the quarter ended December 31, 1995, Commission
File No. 1-9961.
(17) Incorporated herein by reference to Exhibit 10.9(d) filed with TMCC's
Report on Form 10-K for the year ended September 30, 1996, Commission
File No. 1-9961.
(18) Incorporated herein by reference to Exhibit 10.9(e) filed with TMCC's
Report on Form 10-K for the year ended September 30, 1996, Commission
File No. 1-9961.
(19) Incorporated herein by reference to Exhibit 4.1 filed with Toyota Auto
Lease Trust 1997-A's Report on Form 8-A dated December 23, 1997,
Commission File No. 333-26717
*- Management contract or compensatory plan or arrangement required to be
filed as an exhibit pursuant to applicable rules of the Securities and
Exchange Commission.
-65-
<PAGE>
Exhibit 4.3(a)
SECOND AMENDED AND RESTATED AGENCY AGREEMENT
BY AND AMONG
TOYOTA MOTOR CREDIT CORPORATION
as Issuer
-and-
The Chase Manhattan Bank
as Agent
-and-
Chase Manhattan Bank Luxembourg S.A.
as Paying Agent
------------------------------------
Dated as of July 24, 1997
in respect of a
EURO MEDIUM-TERM NOTE PROGRAM
-----------------------------
<PAGE>
TABLE OF CONTENTS
Clause Page
- ------ ----
1. Definitions and Interpretations................................... 2
2. Appointment of Agent and Paying Agents............................ 6
3. Issue of Temporary Global Notes................................... 7
4. Issue of Permanent Global Notes................................... 7
5. Issue of Definitive Notes......................................... 8
6. Exchanges......................................................... 9
7. Terms of Issue.................................................... 10
8. Payments.......................................................... 11
9. Determinations and Notifications in Respect of Notes.............. 13
10. Notice of Any Withholding or Deduction............................ 14
11. Duties of the Agent in Connection with Early Redemption........... 14
12. Publication of Notices............................................ 15
13. Cancellation of Notes, Receipts, Coupons and Talons............... 15
14. Issue of Replacement Notes, Receipts, Coupons and Talons.......... 16
15. Copies of this Agreement and Each Pricing Supplement
Available for Inspection.......................................... 18
16. Commissions and Expenses.......................................... 18
17. Indemnity......................................................... 18
18. Repayment by the Agent............................................ 19
19. Conditions of Appointment......................................... 19
20. Communication Between the Parties................................. 20
21. Changes in Agent and Paying Agents................................ 20
22. Merger and Consolidation.......................................... 22
23. Notifications..................................................... 23
24. Change of Specified Office........................................ 23
25. Notices........................................................... 23
i
<PAGE>
26. Taxes and Stamp Duties............................................ 23
27. Currency Indemnity................................................ 24
28. Amendments; Meetings of Holders................................... 24
29. Calculation Agency Agreement...................................... 26
30. Descriptive Headings.............................................. 26
31. Governing Law..................................................... 26
32. Counterparts...................................................... 26
ii
<PAGE>
APPENDICES
----------
Page
----
APPENDIX A
Terms and Conditions of the Notes A-1
APPENDIX B
Forms of Global and Definitive Notes, Coupons, Receipts
and Talons B-1
APPENDIX C
Form of Calculation Agency Agreement C-1
APPENDIX D
Form of Operating & Administrative Procedures Memorandum D-1
APPENDIX E
Form of the Notes E-1
iii
<PAGE>
SECOND AMENDED AND RESTATED AGENCY AGREEMENT
in respect of a
EURO MEDIUM-TERM NOTE PROGRAM
WHEREAS, the Company has entered into the Second Amended and Restated Program
Agreement dated July 24, 1997 (the "Program Agreement") with Merrill Lynch
International, Banque Paribas, Credit Suisse First Boston (Europe) Limited,
Goldman Sachs International, Lehman Brothers International (Europe), Merrill
Lynch Finance SA, J.P. Morgan Securities Ltd., Morgan Stanley & Co.
International Limited, Nomura International plc, Swiss Bank Corporation and
UBS Limited (the "Dealers") pursuant to which the Company may issue notes (the
"Notes") in an aggregate principal amount of up to U.S.$16,000,000,000 (or its
equivalent in other currencies or currency units) outstanding at any time.
WHEREAS, the Company entered into an Agency Agreement dated October 30, 1992
with The Chase Manhattan Bank (formerly known as The Chase Manhattan Bank,
N.A.), as agent ("Agent") and Chase Manhattan Bank Luxembourg S.A., as paying
agent (the "Paying Agent") in connection with the issuance of Notes under the
Program Agreement (the "Original Agreement"), which Original Agreement was
amended by Amendment No. 1 dated July 26, 1993;
WHEREAS, the Company entered into an Amended and Restated Agency Agreement
dated July 28, 1994 with the Agent and the Paying Agent, as amended by
Amendment No. 1 dated as of July 27, 1995 and Amendment No. 2 dated as of July
19, 1996 (the "First Amended and Restated Agency Agreement").
WHEREAS, as permitted by Clause 28 of the First Amended and Restated Agency
Agreement, the parties desire to amend and restate in its entirety the First
Amended and Restated Agency Agreement for the purpose of, among other things,
increasing the aggregate principal amount of the Notes offered by the Company.
NOW, THEREFORE, BE IT RESOLVED that the First Amended and Restated Agency
Agreement is hereby amended and restated in its entirety to read as follows:
THIS SECOND AMENDED AND RESTATED AGENCY AGREEMENT (the "Agreement") is made as
of July 24, 1997 BY AND AMONG:
(1) Toyota Motor Credit Corporation of Torrance, California, U.S.A. (the
"Company");
(2) The Chase Manhattan Bank of Trinity Tower, 9 Thomas More Street, London
E1 9YT (the "Agent", which expression shall include any successor agent
appointed in accordance with Clause 21); and
(3) Chase Manhattan Bank Luxembourg S.A. of 5 Rue Plaetis, L-2338 Luxembourg
(together with the Agent, the "Paying Agents", which expression shall include
any additional or successor paying agent appointed in accordance with Clause
21 and "Paying Agent" shall mean any of the Paying Agents).
1
<PAGE>
1. Definitions and Interpretations
-------------------------------
(1) The following expressions shall have the following meanings:
"BALO" means the Bulletin des Annonces Legales Obligatoires;
"CBV" means the Conseil des Bourses de Valeurs;
"Cedel Bank" means Cedel Bank, societe anonyme;
"COB" means the Commission des Operations de Bourse;
"Conditions" means, in respect of any Series of Notes, the terms and
conditions of the Notes of such Series, such terms and conditions being in the
form or substantially in the form set out in Appendix A hereto or in such
other form, having regard to the terms of the relevant Series, as may be
agreed between the Company, the Agent and the relevant Purchaser or Purchasers
as from time to time;
"Dealer" means each of Merrill Lynch International, Banque Paribas, Credit
Suisse First Boston (Europe) Limited, Goldman Sachs International, Lehman
Brothers International (Europe), Merrill Lynch Finance SA, J.P. Morgan
Securities Ltd., Morgan Stanley & Co. International Limited, Nomura
International plc, Swiss Bank Corporation and UBS Limited and any other
entities appointed as dealers from time to time pursuant to the Program
Agreement;
"Definitive Note" means a Note in definitive form substantially in the form
set out in Appendix B-3 hereto (or in such other form as may be agreed between
the Company, the Agent and the relevant Purchaser or Purchasers) issued or to
be issued by the Company pursuant to this Agreement in exchange for the whole
or part of a Permanent Global Note;
"Dual Currency Notes" means Notes in respect of which principal and/or
interest is payable in one or more Specified Currencies other than the
Specified Currency in which they are denominated;
"ECU Settlement Day" means an ECU Settlement Date (as defined in the 1991 ISDA
Definitions, as it may be amended or updated as of the Issue Date of any
Note);
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels office,
as operator of the Euroclear System;
"French Franc" means the lawful currency for the time being of the Republic of
France;
"French Franc Note" means a Note denominated in French Francs or denominated
in another currency or currencies but linked directly or indirectly to French
Francs;
"FSA" means the Financial Services Act 1986 of the United Kingdom;
"Global Note" means a Temporary Global Note or a Permanent Global Note;
2
<PAGE>
"ISDA Definitions" means the 1991 ISDA Definitions, as amended or updated from
time to time, as published by the International Swaps and Derivatives
Association, Inc.;
"Issue Date" means, in respect of any Note, the date of issue and purchase of
such Note pursuant to Clause 2 of the Program Agreement, being in the case of
any Note in the form of a Definitive Note, the same date as the date of issue
of the Global Note which initially represented such Note;
"Listing Particulars" means any listing particulars with regard to the issue
by the Company of Notes (other than unlisted Notes) approved under the Listing
Rules by the Council of the London Stock Exchange (or such other body to which
its functions have been transferred under section 157 of the FSA) in
accordance with the provisions of section 144 of the FSA (including any
supplementary listing particulars published in accordance with the provisions
of this Agreement or otherwise);
"Listing Agent" means Merrill Lynch International of Ropemaker Place, 25
Ropemaker Street, London EC2Y 9LY (in the case of Notes listed on the London
Stock Exchange) or Merrill Lynch Finance SA of 112, avenue kleber, 75761,
Paris, Cedex 16 France (in the case of Notes listed on the Paris Bourse) or
such other listing agent as the Company may from time to time appoint for the
purposes of liaising with any Stock Exchange;
"Listing Rules" means:
(a) in the case of Notes which are, or are to be, listed on the London Stock
Exchange, the listing rules made by the London Stock Exchange (or such other
body to which its functions have been transferred under section 157 of the
FSA) under section 142 of the FSA;
(b) in case of Notes which are, or are to be, listed on the Paris Bourse, the
applicable listing rules made by the Direction du Tresor, the SBF, the COB,
the CBV or such other applicable governing entities; or
(c) in the case of Notes which are, or are to be, listed on a Stock Exchange
other than the London Stock Exchange, the listing rules and regulations for
the time being in force for such Stock Exchange;
"London Stock Exchange" means the London Stock Exchange Limited;
"Note" means any note issued or to be issued by the Company pursuant to the
Program Agreement, which Note may be represented by a Global Note or a
Definitive Note;
3
<PAGE>
"Noteholders" means the several persons who are for the time being holders of
outstanding Notes save that for so long as any of the Notes are represented by
a Global Note, each person who is for the time being shown in the records of
Euroclear, Cedel Bank or such other applicable clearing agency as the holder
of a particular principal amount of such Notes (other than a clearing agency
(including Cedel Bank and Euroclear) that is itself an account holder of Cedel
Bank, Euroclear or any other applicable clearing agency for a Series of Notes)
(in which regard any certificate or other document issued by Euroclear, Cedel
Bank or such other applicable clearing agency as to the principal amount of
such Notes standing to the account of any person shall be conclusive and
binding for all purposes save in the case of manifest error) shall be treated
by the Company, the Agent and any other Paying Agent as a holder of such
principal amount of such Notes for all purposes other than for the payment of
principal and interest on such Notes, the right to which shall be vested, as
against the Company, the Agent and any other Paying Agent, solely in the
bearer of the Global Note in accordance with and subject to its terms (and the
expressions "Noteholder", "holder of Notes" and related expressions shall be
construed accordingly);
"Offering Circular" means the Offering Circular relating to the Program as
revised, supplemented, amended or updated, including in relation to each
Series of Notes, the Pricing Supplement relating to such Series and such other
documents as are from time to time incorporated therein by reference;
"Outstanding" means, in relation to the Notes, all the Notes issued other than
(a) those which have been redeemed in full in accordance with this Agreement
or the Conditions, (b) those in respect of which the date for redemption in
accordance with the Conditions has occurred and the redemption moneys therefor
(including all interest (if any) accrued thereon to the date for such
redemption and any interest (if any) payable under the Conditions after such
date) have been duly paid to the Agent as provided herein (and, where
appropriate, notice has been given to the Noteholders in accordance with
Condition 16) and remain available for payment against presentation of Notes,
(c) those which have become void under Condition 15, (d) those which have been
purchased and cancelled as provided in Condition 5, (e) those mutilated or
defaced Notes which have been surrendered in exchange for replacement Notes
pursuant to Condition 14, (f) (for the purposes only of determining how many
Notes are outstanding and without prejudice to their status for any other
purpose) those Notes alleged to have been lost, stolen or destroyed and in
respect of which replacement Notes have been issued pursuant to Condition 14
and (g) Temporary Global Notes to the extent that they shall have been duly
exchanged in whole for Permanent Global Notes or Definitive Notes and
Permanent Global Notes to the extent that they shall have been duly exchanged
in whole for Definitive Notes, in each case pursuant to their respective
provisions;
"Permanent Global Note" means a Global Note substantially in the form set out
in Appendix B-2 hereto (or in such other form as may be agreed between the
Company, the Agent and the relevant Purchaser or Purchasers) comprising Notes
issued or to be issued by the Company in exchange for the whole or part of a
Temporary Global Note issued in respect of the Notes of the same Series;
"Pricing Supplement" means the pricing supplement issued in relation to each
Series of Notes (substantially in the form of Annex B to the Procedures
Memorandum) as a supplement to the Offering Circular and giving details of
that Tranche;
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"Program" means the Euro Medium-Term Note Program established by the Program
Agreement;
"Program Agreement" means the Second Amended and Restated Program Agreement
dated July 24, 1997 between the Company and the Dealers concerning the
purchase of Notes to be issued by the Company and includes any subsequent
amendment or supplement thereto;
"Purchaser" means a Dealer or any third party other than a dealer (as defined
in Section 2(12) of the United States Securities Act of 1933, as amended), who
agrees to purchase Notes pursuant to the Program Agreement and references to a
relevant Purchaser or Purchasers mean in relation to any Note, the Purchaser
or Purchasers to whom the Company has agreed to issue and sell such Note;
"Series" means all Notes which are denominated in the same currency and which
have the same Maturity Date and Interest/Payment Basis and interest payment
dates (if any) (all as indicated in the applicable Pricing Supplement) and the
terms of which (except for the Issue Date or Interest Commencement Date (as
the case may be) and/or the Issue Price (all as indicated as aforesaid)) are
otherwise identical (including whether or not the Notes are listed); and the
expressions "Notes of the relevant Series" and "holders of Notes of the
relevant Series" and related expressions shall be construed accordingly;
"SBF" means SBF - Bourse de Paris;
"SICOVAM" means Sicovam SA and the Intermediaries financiers habilites
authorized to maintain accounts therein.
"Specified Currency" means the currency (which expression shall include
European Currency Units ("ECUs") and other currency units) in which Notes are
denominated and, in the case of Dual Currency Notes, the currency or
currencies in which payment in respect of the Notes is to be made;
"Stock Exchange" means the London Stock Exchange, the Paris Bourse or any
other or further stock exchange(s) on which any Notes may from time to time be
listed and reference in this Agreement to the "relevant Stock Exchange" shall,
in relation to any Notes, be references to the Stock Exchange on which such
Notes are from time to time, or will be, listed;
"Temporary Global Note" means a Global Note substantially in the form set out
in Appendix B-1 hereto (or in such other form as may be agreed between the
Company, the Agent and the relevant Purchaser or Purchasers) comprising Notes
issued or to be issued by the Company pursuant to the Program Agreement and
issued in respect of the Notes of the same Series;
"Tranche" means all Notes of the same Series with the same Issue Date; and
"U.S.$" and "U.S. dollars" means the lawful currency for the time being of the
United States.
(2) Terms and expressions (including the definitions of currencies or
composite currencies) defined in the Conditions or Appendix E or used in the
applicable Pricing Supplement shall have the same meanings in this Agreement,
except where the context requires otherwise.
(3) Any references to Notes shall, unless the context otherwise
requires, include any Temporary Global Notes, Permanent Global Notes and
Definitive Notes.
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2. Appointment of Agent and Paying Agents
--------------------------------------
(1) The Agent is hereby appointed as agent of the Company, to act as
issuing and principal paying agent, upon the terms and subject to the
conditions set out below, for the purposes of, inter alia:
(a) completing, authenticating and issuing Notes;
(b) exchanging Temporary Global Notes for Permanent Global Notes or
Definitive Notes and in the case where Temporary Global Notes are initially
exchanged for Permanent Global Notes, exchanging Permanent Global Notes for
Definitive Notes in accordance with the terms of such Global Notes;
(c) and Coupons;
(d) determining the interest and/or other amounts payable in respect
of the Notes in accordance with the Conditions;
(e) arranging on behalf of the Company for notices to be communicated
to the Noteholders and the relevant Stock Exchanges;
(f) ensuring that all necessary action is taken to comply with the
periodic reporting and notification requirements of the Bank of England, the
German Central Bank (including the monthly notification as to the amounts,
issue dates and other terms of each Tranche of DM-denominated Notes issued by
the Company during such month), the Ministry of Finance of Japan (including
any monthly reports as to the amounts, issue dates and other terms of each
Tranche of Yen-denominated Notes) and other applicable Japanese authorities,
the Direction du Tresor of France or any other competent authority of any
relevant currency with respect to the Notes to be issued under the Program;
(g) receiving notice from Euroclear, Cedel Bank and/or such other
applicable clearing agency relating to the certificates of non-U.S. beneficial
ownership of the Notes;
(h) upon certification by the participating Dealer or Dealers to the
Agent that the distribution with respect to a particular Tranche of Notes has
been completed, determining and certifying to Cedel Bank, Euroclear or such
other applicable clearing agency the applicable Exchange Date.
(i) performing all other obligations and duties imposed upon it by
the Conditions and this Agreement.
(j) Any of the duties and obligations of the Agent in its capacity of
issuing and principal paying agent set forth in Subclauses (a), (b), (c), (d),
(e), (g), (h) and (i) may, with the consent of the Company, be delegated by
the Agent with respect to a particular Series of Notes to a third party,
provided such third party's performance is subject to the overall supervision
and control of the Agent.
(2) Each Paying Agent is hereby appointed as paying agent of the Company,
upon the terms and subject to the conditions set out below, for the purposes
of paying sums due on Notes, Receipts and Coupons.
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3. Issue of Temporary Global Notes
-------------------------------
(1) Subject to Subclause 3(2), following receipt of the applicable
Pricing Supplement signed by the Company with respect of an issue of Notes in
accordance with the provisions of the Procedures Memorandum set out in
(2) Appendix D hereto (as from time to time varied, with the prior
approval of the Agent, by the Company and the relevant Purchaser or Purchasers
of the Notes of such issue) the Agent will take the steps required of the
Agent in the Procedures Memorandum. For this purpose the Agent is authorized
on behalf of the Company:
(a) to prepare a Temporary Global Note or Temporary Global Notes
containing the relevant Conditions and to complete, in accordance with such
Pricing Supplement, the necessary details on such Temporary Global Note(s);
(b) to authenticate such Temporary Global Note(s); and
(c) to deliver such Temporary Global Note(s) to the specified common
depositary of Euroclear, Cedel Bank and/or such other applicable clearing
agency as is specified in the related Pricing Supplement against receipt from
such common depositary of confirmation that such common depositary is holding
the Temporary Global Note(s) in safe custody for the account of Euroclear,
Cedel Bank or such other applicable clearing agency and to instruct Euroclear,
Cedel Bank and/or such other applicable clearing agency (as the case may be)
to credit the Notes represented by such Temporary Global Note(s), unless
otherwise agreed in writing between the Agent and the Company, to the Agent's
distribution account (or in the case of a syndicated bond issue, the lead
manager's account).
(2) The Agent shall only be required to perform its obligations under
Subclause 3(1) if it holds a master Temporary Global Note duly executed by a
person or persons authorized to execute the same on behalf of the Company,
which may be used by the Agent for the purpose of preparing Temporary Global
Note(s) in accordance with Subclause 3(1)(a).
(3) The Agent shall provide Euroclear, Cedel Bank and/or such other
applicable clearing agency with the notifications, instructions or other
information to be given by the Agent to Euroclear, Cedel Bank and/or such
other applicable clearing agency.
(4) Any of the duties and obligations of the Agent set forth in this
Clause 3 may, with the consent of the Company, be delegated by the Agent with
respect to a particular Series of Notes to a third party, provided such third
party's performance is subject to the overall supervision and control of the
Agent.
4. Issue of Permanent Global Notes
-------------------------------
(1) Subject to Subclause 4(2), upon the occurrence of any event which
pursuant to the terms of a Temporary Global Note requires the issue of a
Permanent Global Note or Definitive Notes, the Agent shall issue a Permanent
Global Note or Definitive Notes, as the case may be, in accordance with the
terms of the Temporary Global Note. For this purpose the Agent is authorized
on behalf of the Company:
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<PAGE>
(a) to prepare a Permanent Global Note containing the relevant
Conditions and to complete, in accordance with the terms of the Temporary
Global Note, the necessary details on such Permanent Global Note and attach a
copy of the applicable Pricing Supplement to such Permanent Global Note;
(b) to authenticate such Permanent Global Note; and
(c) to deliver such Permanent Global Note to the specified common
depositary that is holding the Temporary Global Note for the time being on
behalf of Euroclear, Cedel Bank and/or such other applicable clearing agency
as is specified in the related Pricing Supplement in exchange for such
Temporary Global Note or, in the case of a partial exchange, after noting the
details of such exchange in the appropriate spaces on both the Temporary
Global Note and the Permanent Global Note, and in either case against receipt
from the common depositary of confirmation that such common depositary is
holding the Permanent Global Note in safe custody for the account of
Euroclear, Cedel Bank and/or such other applicable clearing agency (as the
case may be).
(2) The Agent shall only be required to perform its obligations under
Subclause 4(1) if it holds a master Permanent Global Note duly executed by a
person or persons authorized to execute the same on behalf of the Company,
which may be used by the Agent for the purpose of preparing Permanent Global
Notes(s) in accordance with Subclause 4(1)(a).
(3) The Agent shall provide Euroclear, Cedel Bank or such other
applicable clearing agency with the notifications, instructions or other
information to be given by the Agent to Euroclear, Cedel Bank or such other
applicable clearing agency.
(4) Any of the duties and obligations of the Agent set forth in this
Clause 4 may, with the consent of the Company, be delegated by the Agent with
respect to a particular Series of Notes to a third party, provided such third
party's performance is subject to the overall supervision and control of the
Agent.
5. Issue of Definitive Notes
-------------------------
(1) Upon notice from Euroclear, Cedel Bank or such applicable clearing
agency pursuant to the terms of a Temporary Global Note or Permanent Global
Note, as the case may be, requiring the issue of one or more Definitive
Note(s), the Agent shall deliver the relevant Definitive Note(s) in accordance
with the terms of the relevant Global Note. For this purpose, the Agent is
hereby authorized on behalf of the Company:
(a) to authenticate or arrange for authentication on its behalf (if
so instructed by the Company) such Definitive Note(s); and
8
<PAGE>
(b) to deliver such Definitive Note(s) to or to the order of
Euroclear, Cedel Bank and/or such other applicable clearing agency as is
specified in the related Pricing Supplement either in exchange for such Global
Note or, in the case of a partial exchange, on entering details of any partial
exchange of the Global Note in the relevant space in Schedule Two of such
Global Note; provided that the Agent shall only permit a partial exchange of
Notes represented by a Permanent Global Note for Definitive Notes if the Notes
which continue to be represented by such Permanent Global Note are regarded as
fungible by Euroclear, Cedel Bank and/or such other applicable clearing agency
with the Definitive Notes issued in partial exchange therefor.
The Agent shall notify the Company forthwith upon receipt of a request for
issue of Definitive Note(s) in accordance with the provisions of a Global
Note (and the aggregate principal amount of such Temporary Global Note or
Permanent Global Note, as the case may be, to be exchanged in connection
therewith).
(2) The Company undertakes to deliver to the Agent, pursuant to a request
for the issue of Definitive Notes under the terms of the relevant Global Note,
sufficient numbers of executed Definitive Notes to enable the Agent to comply
with its obligations under this Clause 5.
(3) Any of the duties and obligations of the Agent set forth in this
Clause 5 may, with the consent of the Company, be delegated by the Agent with
respect to a particular Series of Notes to a third party, provided such third
party's performance is subject to the overall supervision and control of the
Agent.
6. Exchanges
---------
Upon any exchange of all or a portion of an interest in a Temporary Global
Note for an interest in a Permanent Global Note or for Definitive Notes or
upon any exchange of all or a portion of an interest in a Permanent Global
Note for Definitive Notes, the Global Note shall be endorsed to reflect the
reduction of its principal amount by the aggregate principal amount so
exchanged. Until exchanged in full, the holder of an interest in any Global
Note shall in all respects be entitled to the same benefits as the holder of
Notes, Receipts and Coupons authenticated and delivered hereunder, subject as
set out in the Conditions. The Agent is hereby authorized on behalf of the
Company (a) to endorse or to arrange for the endorsement of the relevant
Global Note to reflect the reduction in the principal amount represented
thereby by the amount so exchanged and, if appropriate, to endorse the
Permanent Global Note to reflect any increase in the principal amount
represented thereby, and in either case, to sign in the relevant space on the
relevant Global Note recording such exchange or increase; and (b) in the case
of a total exchange, to cancel or arrange for the cancellation of the relevant
Global Note. Any of the duties and obligations of the Agent set forth in this
Clause 6 may, with the consent of the Company, be delegated by the Agent with
respect to a particular Series of Notes to a third party, provided such third
party's performance is subject to the overall supervision and control of the
Agent.
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7. Terms of Issue
--------------
(1) The Agent shall cause all Temporary Global Notes, Permanent Global
Notes and Definitive Notes delivered to and held by it under this Agreement to
be maintained in safe custody and shall ensure that such Notes are issued only
in accordance with the provisions of this Agreement and the relevant Global
Note and Conditions.
(2) Subject to the procedures set out in the Procedures Memorandum, for
the purposes of Subclause (1) the Agent is entitled to treat a telephone,
telex or facsimile communication from a person purporting to be (and who the
Agent, after making reasonable investigation, believes in good faith to be)
the authorized representative of the Company named in the list referred to in,
or notified pursuant to, Subclause 19(7) as sufficient instructions and
authority of the Company for the Agent to act in accordance with Subclause
7(1).
(3) In the event that a person who has signed on behalf of the Company a
master Temporary Global Note, a master Permanent Global Note or Definitive
Notes not yet issued but held by the Agent in accordance with Subclause 5(1)
ceases to be authorized as described in Subclause 19(7), the Agent shall
(unless the Company gives notice to the Agent that Notes signed by that person
do not constitute valid and binding obligations of the Company or otherwise
until replacements have been provided to the Agent) continue to have authority
to issue any such Notes, and the Company hereby warrants to the Agent that
such Notes shall, unless notified as aforesaid, be valid and binding
obligations of the Company. Promptly upon such person ceasing to be
authorized, the Company shall provide the Agent with replacement master
Temporary Global Notes, master Permanent Global Notes and Definitive Notes and
the Agent shall cancel and destroy the master Temporary Global Notes, master
Permanent Global Notes and Definitive Notes held by it which are signed by
such person and shall provide to the Company a confirmation of destruction in
respect thereof specifying the Notes so cancelled and destroyed.
(4) Unless otherwise agreed in writing between the Company and the Agent,
each Note credited to the Agent's distribution account with Euroclear, Cedel
Bank or such other applicable clearing agency following the delivery of a
Temporary Global Note or Permanent Global Note to a common depositary pursuant
to Subclause 3(1)(c) or Subclause 4(1)(c), respectively, shall be held to the
order of the Company. The Agent shall procure that the principal amount of
Notes which the relevant Purchaser has agreed to purchase is:
(a) debited from the Agent's distribution account; and
(b) credited to the securities account of such Purchaser with
Euroclear, Cedel Bank or such other clearing agency (as specified in the
Letter from Lead Manager/Dealer as provided for in Annex C to the Procedures
Memorandum set forth in Appendix D to this Agreement),
in each case only upon receipt by the Agent on behalf of the Company of the
purchase price due from the relevant Purchaser in respect of such Notes.
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<PAGE>
(5) If on the relevant Issue Date a Purchaser does not pay the full
purchase price due from it in respect of any Note (the "Defaulted Note") and,
as a result, the Defaulted Note remains in the Agent's distribution account
with Euroclear, Cedel Bank or other applicable clearing agency after such
Issue Date, the Agent will continue to hold the Defaulted Note to the order of
the Company. The Agent shall notify the Company forthwith of the failure of
the Purchaser to pay the full purchase price due from it in respect of any
Defaulted Note and, subsequently, shall notify the Company forthwith upon
receipt from the Purchaser of the full purchase price in respect of such
Defaulted Note.
(6) If the Agent pays an amount (the "Advance") to the Company on the
basis that a payment (the "Payment") will be received from a Purchaser and if
the Payment is not received by the Agent on the date the Agent pays the
Company, the Agent shall notify the Company by telex or facsimile that the
Payment has not been received and the Company shall repay to the Agent the
Advance and shall pay interest on the Advance (or the unreimbursed portion
thereof) from (and including) the date such Advance is made to (but excluding)
the earlier of repayment of the Advance and receipt by the Agent of the
Payment (at a rate quoted at that time by the Agent as its cost of funding the
Advance).
(7) In the event of an issue of Notes, the Agent will promptly, and in
any event prior to the Issue Date in respect of such issue, send the Pricing
Supplement to the Company, relevant Stock Exchange and the relevant Dealers.
8. Payments
--------
(1) The Agent shall advise the Company, no later than ten Business Days
(as defined below) immediately preceding the date on which any payment is to
be made to the Agent pursuant to this Subclause 8(1), of the payment amount,
value date and payment instructions and the Company shall on each date on
which any payment in respect of any Notes becomes due, transfer to an account
specified by the Agent not later than the Payment Time such amount in the
relevant currency as shall be sufficient for the purposes of such payment in
funds settled through such payment system as the Agent and the Company may
agree. As used in this Subclause 8(1), the term "Payment Time" means 2:00
p.m. local time in the principal financial center of the country of the
currency in which the payment falls is to be made (which in the case of
payment in ECU is Brussels).
(2) The Agent shall advise the Company, no later than ten Business Days
immediately preceding the date on which any payment is to be made to the Agent
pursuant to Subclause 8(1), of the payment amount, value date and payment
instructions and the Company shall ensure that, no later than the third
Business Day immediately preceding the date on which any payment is to
be made to the Agent pursuant to Subclause 8(1), the Agent shall receive a
confirmation from the Company that payment will be made. For the purposes of
this Clause 8, "Business Day" means (unless otherwise stated in the applicable
Pricing Supplement) a day which is:
(a) a day (other than a Saturday or a Sunday) on which commercial
banks and foreign exchange markets settle business in London;
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<PAGE>
(b) either (i) in relation to a payment to be made in a Specified
Currency other than ECU, a day on which commercial banks and foreign exchange
markets settle payments in the principal financial center of the country of
the relevant Specified Currency (if other than London) or (ii) in relation to
a payment to be made in ECU, an ECU Settlement Day (as defined herein); and
(c) a day (other than a Saturday or Sunday) on which banks are open
for business in the relevant place of business of the Agent.
Unless otherwise provided in the applicable Pricing Supplement, the principal
financial center of any country for any Series of Notes for the purposes of
this Subclause 8(2) shall be as provided in the ISDA Definitions on the Issue
Date of such Series of Notes (except in the case of New Zealand and Australia,
where the principal financial center will be as specified in the applicable
Pricing Supplement).
(3) Subject to the Agent being satisfied in its sole discretion that
payment will be duly made as provided in Subclause 8(1), the Agent or the
relevant Paying Agent shall pay or cause to be paid all amounts due in respect
of the Notes on behalf of the Company in the manner provided in the
Conditions. If any payment provided for in Subclause 8(1) is made late but
otherwise in accordance with the provisions of this Agreement, the Agent and
each Paying Agent shall nevertheless make payments in respect of the Notes as
aforesaid following receipt by it of such payment.
(4) If for any reason the Agent considers in its sole discretion that the
amounts to be received by the Agent pursuant to Subclause 8(1) will be, or the
amounts actually received by it pursuant thereto are, insufficient to satisfy
all claims in respect of all payments then falling due in respect of the
Notes, the Agent shall then forthwith notify the Company of such insufficiency
and, until such time as the Agent has received the full amount of all such
payments, neither the Agent nor any Paying Agent shall be obliged to pay any
such claims.
(5) Without prejudice to Subclauses 8(3) and 8(4), if the Agent pays any
amounts to the holders of Notes, Receipts or Coupons or to any Paying Agent at
a time when it has not received payment in full in respect of the relevant
Notes in accordance with Subclause 8(1) (the excess of the amounts so paid
over the amounts so received being the "Shortfall"), the Company shall, in
addition to paying amounts due under Subclause 8(1), pay to the Agent on
demand interest (at a rate which represents the Agent's actual overnight cost
of funding the Shortfall) on the Shortfall (or the unreimbursed portion
thereof) until the receipt in full by the Agent of the Shortfall. The Agent
shall notify the Company by tested telex or facsimile as soon as practicable,
it being understood that the Company shall have the right to make such payment
subsequently with good value as of such Business Day.
(6) The Agent shall on demand promptly reimburse each Paying Agent for
payments in respect of Notes properly made by such Paying Agent in accordance
with this Agreement and the Conditions unless the Agent has notified the
Paying Agent, prior to the opening of business in the location of the office
of the Paying Agent through which payment in respect of the Notes can be made
on the due date of a payment in respect of the Notes, that the Agent does not
expect to receive sufficient funds to make payment of all amounts falling due
in respect of such Notes.
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9. Determinations and Notifications in Respect of Notes
----------------------------------------------------
(1) The Agent shall make all such determinations and calculations
(howsoever described) as it is required to do under the Conditions, all
subject to and in accordance with the Conditions provided that certain
calculations with respect to any Series of Notes may be made by an agent (the
"Calculation Agent") appointed by the Company and acceptable to the Agent.
(2) The Agent shall not be responsible to the Company or to any third
party (except in the event of negligence, wilful default or bad faith) as a
result of the Agent having acted on any quotation given by any Reference Bank
which subsequently may be found to be incorrect.
(3) The Agent shall promptly notify the Company, the other Paying Agents
and (in respect of a Series of Notes listed on a Stock Exchange) the relevant
Stock Exchange of, inter alia, each Rate of Interest, Interest Amount and
Interest Payment Date and all other amounts, rates and dates which it is
obliged to determine or calculate under the Conditions as soon as practicable
after the determination thereof (and in any event no later than the tenth
Business Day (as defined in Clause 8) immediately preceding the date on which
any payment is to be made to the Agent pursuant to Subclause 8(1)) and of any
subsequent amendment thereto pursuant to the Conditions.
(4) The Agent shall use its best efforts to cause each Rate of Interest,
Interest Amount and Interest Payment Date and all other amounts, rates and
dates which it is obliged to determine or calculate under the Conditions (or
which is provided to the Agent by any other Calculation Agent appointed by the
Company as provided in Subclause 9(1)) to be published as required in
accordance with the Conditions as soon as possible after their determination
or calculation.
(5) If the Agent does not at any material time for any reason determine
and/or calculate and/or publish the Rate of Interest, Interest Amount and/or
Interest Payment Date in respect of any Interest Period or any other amount,
rate or date as provided in this Clause 9, it shall forthwith notify the
Company and the other Paying Agents of such fact.
(6) The Agent shall provide to the German Central Bank, at the end of
each calendar month, information on the amount, interest rate and other terms
of each issue of Deutsche Mark denominated Notes during the month, and such
other information as the German Central Bank may require from time to time.
(7) The Agent shall comply with the reporting procedures and requirements
from time to time of the Direction du Tresor, COB, CBV, SBF and the Comite des
Emissions relating to the Marche de l'Euro-Franc or any successor authority
with respect to issues of Notes denominated in, or directly or indirectly
linked with, the French Franc.
(8) The Agent shall provide to the Dealer or Dealers with respect to any
Series of Notes certification as to the completion of distribution of such
Series of Notes.
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<PAGE>
(9) For purposes of monitoring the aggregate principal amount of Notes
issued under the Program, the Agent shall determine the U.S. dollar equivalent
of the principal amount of each issue of Notes denominated in another
currency, each issue of Dual Currency Notes and each issue of Indexed Notes as
follows:
(a) the U.S. dollar equivalent of Notes denominated in a currency
other than U.S. dollars shall be determined by the Agent as of 2:30 p.m.
London time on the Issue Date for such Notes by reference to the spot rate
displayed on a page on the Reuters Monitor Money Rates Service or the
appropriate Associated Press-Dow Jones Telerate Service or such other service
as is agreed between the Agent and the Company from time to time;
(b) the U.S. dollar equivalent of Dual Currency Notes and Indexed
Notes shall be determined in the manner specified above by reference to the
original principal amount of such Notes;
(c) the U.S. dollar equivalent of Zero Coupon Notes and other Notes
issued at a discount shall be calculated in the manner specified above by
reference to the net proceeds received by the Company for the relevant
issue; and
(d) the U.S. dollar equivalent of Partly Paid Notes shall be the
principal amount regardless of the amount paid up on such Notes.
The Agent shall promptly notify the Company of each determination made as
aforesaid.
10. Notice of Any Withholding or Deduction
--------------------------------------
If the Company is, in respect of any payments, compelled to withhold or deduct
any amount for or on account of taxes, duties, assessments or governmental
charges as specifically contemplated under the Conditions, the Company shall
give notice thereof to the Agent as soon as it becomes aware of the
requirement to make such withholding or deduction and shall give to the Agent
such information as it shall require to enable it to comply with such
requirement.
11. Duties of the Agent in Connection with Early Redemption
-------------------------------------------------------
(1) If the Company decides to redeem any Notes for the time being
outstanding prior to their Maturity Date in accordance with the Conditions,
the Company shall give notice of such decision to the Agent not less than 15
days before the relevant redemption date or such shorter period that is
acceptable to the Agent and is set forth in the applicable Pricing Supplement.
(2) If only some of the Notes of like tenor and of the same Series are to
be redeemed on such date the Agent shall make the required drawing in
accordance with the Conditions.
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<PAGE>
(3) The Agent shall publish the notice required in connection with any
such redemption and shall at the same time also publish a separate list of
serial numbers of any Notes previously drawn and not presented for redemption.
Such notice shall specify the date fixed for redemption, the redemption
amount, the manner in which redemption will be effected and, in the case of a
partial redemption, the serial numbers of the Notes to be redeemed. Such
notice will be published in accordance with the Conditions.
12. Publication of Notices
----------------------
On behalf of and at the request and expense of the Company, the Agent shall
cause to be published all notices required to be given by the Company in
accordance with the Conditions. Forthwith upon the receipt by the Agent of a
demand or notice from any Noteholder in accordance with the Conditions, the
Agent shall forward a copy thereof to the Company.
13. Cancellation of Notes, Receipts, Coupons and Talons
---------------------------------------------------
(1) All Notes which are purchased pursuant to the Conditions by or on
behalf of the Company, together (in the case of Definitive Notes) with all
unmatured Receipts, Coupons or Talons (if any) attached thereto or surrendered
therewith, shall be cancelled by the Company. Where any Notes, Receipts,
Coupons or Talons are purchased and cancelled as aforesaid, the Company shall
procure that all relevant details are promptly given to the Agent and that all
Notes, Receipts, Coupons or Talons so cancelled are delivered
to the Agent. All Notes which are redeemed, all Receipts or Coupons which are
paid and all Talons which are exchanged shall be cancelled by the Agent or
Paying Agent by which they are redeemed, paid or exchanged. Each of the
Paying Agents shall give to the Agent details of all payments made by it and
shall deliver all cancelled Notes, Receipts, Coupons and Talons to the Agent
or to any Paying Agent authorized from time to time in writing by the Agent to
accept delivery of cancelled Notes, Receipts, Coupons and Talons (an
"Authorized Agent").
(2) A certificate stating:
(a) the aggregate principal amount of Notes which have been redeemed
and the aggregate amount paid in respect thereof;
(b) the number of Notes cancelled together (in the case of
Definitive Notes) with details of all unmatured Receipts, Coupons or Talons
(if any) attached thereto or delivered therewith;
(c) the aggregate amount paid in respect of interest on the Notes;
(d) the total number by maturity date of Receipts, Coupons and
Talons so cancelled; and
(e) (in the case of Definitive Notes) the serial numbers of such
Notes,
shall be given to the Company by the Agent as soon as reasonably practicable
and in any event within 30 days after the date of such repayment or, as the
case may be, payment or exchange.
15
<PAGE>
(3) Subject to being duly notified in due time, the Agent shall give a
certificate to the Company, within three months of the date of purchase and
cancellation of Notes as aforesaid, stating:
(a) the principal amount of Notes so purchased and cancelled;
(b) the serial numbers of such Notes; and
(c) the total number by maturity date of the Receipts, Coupons and
Talons (if any) appertaining thereto and surrendered therewith or attached
thereto.
(4) The Agent shall destroy all cancelled Notes, Receipts, Coupons and
Talons (unless otherwise instructed by the Company) and, forthwith upon
destruction, furnish the Company with a certificate of the serial numbers of
the Notes and the number by maturity date of Receipts, Coupons and Talons so
destroyed.
(5) Without prejudice to the obligations of the Agent pursuant to
Subclause 13(2), the Agent shall keep a full and complete record of all Notes,
Receipts, Coupons and Talons (other than serial numbers of Coupons, except
those which have been replaced pursuant to Condition 14) and of all
replacement Notes, Receipts, Coupons or Talons issued in substitution for
mutilated, defaced, destroyed, lost or stolen Notes, Receipts, Coupons or
Talons. The Agent shall at all reasonable time make such record available to
the Company and any person authorized by the Company for inspection and for
the taking of copies thereof or extracts therefrom.
(6) All records and certificates made or given pursuant to this Clause 13
and Clause 14 shall make a distinction between Notes, Receipts, Coupons and
Talons of each Series.
14. Issue of Replacement Notes, Receipts, Coupons and Talons
--------------------------------------------------------
(1) The Company will cause a sufficient quantity of additional forms of
Notes, Receipts, Coupons and Talons to be available, upon request, to the
Agent at its specified office for the purpose of issuing replacement Notes,
Receipts, Coupons and Talons as provided below.
(2) The Agent will, subject to and in accordance with the Conditions and
the following provisions of this Clause 14, cause to be delivered any
replacement Notes, Receipts, Coupons and Talons which the Company may
determine to issue in place of Notes, Receipts, Coupons and Talons which have
been lost, stolen, mutilated, defaced or destroyed.
(3) In the case of a mutilated or defaced Note, the Agent shall ensure
that (unless otherwise covered by such indemnity as the Company may require)
any replacement Note will only have attached to it Receipts, Coupons and
Talons corresponding to those (if any) attached to the mutilated or defaced
Note which is presented for replacement.
(4) The Agent shall not issue any replacement Note, Receipt, Coupon or
Talon unless and until the applicant therefor shall have:
(a) paid such costs as may be incurred in connection therewith;
16
<PAGE>
(b) furnished it with such evidence (including evidence as to the
serial number of such Note, Receipt, Coupon or Talon) and indemnity (which may
include a bank guarantee and/or security) as the Company and the Agent may
reasonably require; and
(c) in the case of any mutilated or defaced Note, Receipt, Coupon or
Talon, surrendered the same to the Agent.
(5) The Agent shall cancel any mutilated or defaced Notes, Receipts,
Coupons and Talons in respect of which replacement Notes, Receipts, Coupons
and Talons have been issued pursuant to this Clause 14 and shall furnish the
Company with a certificate stating the serial numbers of the Notes, Receipts,
Coupons and Talons so cancelled and, unless otherwise instructed by the
Company in writing, shall destroy such cancelled Notes, Receipts, Coupons and
Talons and furnish the Company with a destruction certificate containing the
information specified in Subclause 13(3).
(6) The Agent shall, on issuing any replacement Note, Receipt, Coupon or
Talon, forthwith inform the Company and the Paying Agents of the serial number
of such replacement Note, Receipt, Coupon or Talon issued and (if known) of
the serial number of the Note, Receipt, Coupon or Talon in place of which such
replacement Note, Receipt, Coupon or Talon has been issued. Whenever
replacement Receipts, Coupons or Talons are issued pursuant to the provisions
of this Clause 14, the Agent shall also notify the Paying Agents of the
maturity dates of the lost, stolen, mutilated, defaced or destroyed Receipts,
Coupons or Talons and of the replacement Receipts, Coupons or Talons issued.
(7) The Agent shall keep a full and complete record of all replacement
Notes, Receipts, Coupons and Talons issued and shall make such record
available all at reasonable times to the Company and any persons authorized by
the Company for inspection and for the taking of copies thereof or extracts
therefrom.
(8) Whenever any Note, Receipt, Coupon or Talon for which a replacement
Note, Receipt, Coupon or Talon has been issued and in respect of which the
serial number is known is presented to the Agent or any of the Paying Agents
for payment, the Agent or, as the case may be, the relevant Paying Agent shall
immediately send notice thereof to the Company and the Agent.
(9) Notwithstanding any of the foregoing in this Clause 14, no issue of
replacement Notes, Receipts, Coupons and Talons shall be made or delivered in
the United States.
17
<PAGE>
15. Copies of this Agreement and Each Pricing Supplement Available for
Inspection
------------------------------------------------------------------
The Agent and the Paying Agents shall, for as long as any Note remains
outstanding, hold copies of this Agreement, each Pricing Supplement, the
Company's Articles of Incorporation as amended and restated from time to time
and the latest annual and any interim reports of the Company available for
inspection; provided, however, that if a Paying Agent acts as a Paying Agent
for only some of the Series of Notes issued under the Program, such Paying
Agent need only hold the Pricing Supplements for the Series of Notes for which
it acts as Paying Agent (and any documents specified in the applicable Pricing
Supplements) and the other documents referenced in this Clause 15 shall be
obtained by Noteholders from the Agent or from Paying Agents that act as
Paying Agents for all Series of Notes issued under the Program. For this
purpose, the Company shall furnish the Agent and the Paying Agents with
sufficient copies of the documents they are required to hold.
16. Commissions and Expenses
------------------------
(1) The Company shall pay to the Agent such fees and commissions as the
Company and the Agent may separately agree in respect of the services of the
Agent and the Paying Agents hereunder together with any reasonable out-of-
pocket expenses (including legal, printing, postage, tax, cable and
advertising expenses required in connection with the Notes issued hereunder)
incurred by the Agent and the Paying Agents in connection with their said
services.
(2) The Agent shall make payment of the fees and commissions due
hereunder to the Paying Agents and shall reimburse their expenses promptly
after the receipt of the relevant moneys from the Company. The Company shall
not be responsible for any such payment or reimbursement by the Agent to the
Paying Agents.
17. Indemnity
---------
(1) The Company shall indemnify the Agent and each of the Paying Agents
against any direct losses, liabilities, costs, claims, actions, demands or
expenses (including, but not limited to, all reasonable costs, charges and
expenses paid or incurred in disputing or defending any of the foregoing but
excluding loss of profits) which it may incur or which may be made against the
Agent or any Paying Agent as a result of or in connection with its appointment
by the Company or the exercise of its powers and duties hereunder except such
as may result from its own wilful default, negligence or bad faith or that of
its officers, directors or employees or the breach by it of the terms of this
Agreement.
(2) The Agent and the Paying Agents shall not be liable for any action
taken or omitted hereunder except for their own wilful default, negligence or
bad faith or that of their respective officers, directors or employees or the
breach by any of them of the terms of this Agreement.
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<PAGE>
(3) Neither the Agent nor any of the Paying Agents shall be responsible
for the acts or failure to act of any other of them and each of the Agent and
the Paying Agents shall indemnify the Company against any loss, liability,
cost, claim, action, demand or expense (including, but not limited to, all
reasonable costs, legal fees, charges and expenses paid or incurred in
disputing or defending any of the foregoing) which the Company may incur or
which may be made against it as a result of the breach by the Agent or such
Paying Agents of the terms of this Agreement or its wilful default, negligence
or bad faith or that of its officers, directors or employees.
18. Repayment by the Agent
----------------------
The Agent shall, forthwith on demand, upon the Company being discharged from
its obligation to make payments in respect of any Notes under the Conditions,
provided that there is no outstanding, bona fide and proper claim in respect
of any such payments, pay to the Company sums equivalent to any amounts paid
to it by the Company in respect of such Notes.
19. Conditions of Appointment
-------------------------
(1) The Agent shall be entitled to deal with money paid to it by the
Company for the purpose of this Agreement in the same manner as other money
paid to a banker by its customers except:
(a) that it shall not exercise any right of set-off, lien or similar
claim in respect thereof;
(b) as provided in Subclause 19(2) below; and
(c) that it shall not be liable to account to the Company for any
interest thereon except as otherwise agreed between the Company and the Agent.
(2) In acting hereunder and in connection with the Notes, the Agent and
the Paying Agents shall act solely as agents of the Company and will not
thereby assume any obligations towards or relationship of agency or trust for
or with any of the owners or holders of the Notes, Receipts, Coupons or
Talons, except that all funds held by the Agent or the Paying Agents for
payment to the Noteholders shall be held in trust, to be applied as set forth
herein, but need not be segregated from other funds except as required by law;
provided, however, that monies paid by the Company to the Agent for the
payment of principal or interest on Notes remaining unclaimed at the end of
one year after such principal or interest shall become due and payable shall
be repaid to the Company as provided and in the manner set forth in the Notes
whereupon all liability of the Agent with respect thereto shall cease.
(3) The Agent and the Paying Agents hereby undertake to the Company to
perform such obligations and duties, and shall be obliged to perform such
duties and only such duties, as are herein, in the Conditions and in the
Procedures Memorandum specifically set forth, and no implied duties or
obligations shall be read into this Agreement or the Notes against the Agent
and the Paying Agents.
19
<PAGE>
(4) The Agent may consult with legal and other professional advisers and
the opinion of such advisers shall be full and complete protection in respect
of any action taken, omitted or suffered hereunder in good faith and in
accordance with the opinion of such advisers.
(5) Each of the Agent and the Paying Agents shall be protected and shall
incur no liability for or in respect of any action taken, omitted or suffered
in reliance upon any instruction, request or order from the Company or any
notice, resolution, direction, consent, certificate, affidavit, statement,
cable, telex or other paper or document which it reasonably believes to be
genuine and to have been delivered, signed or sent by the proper party or
parties or upon written instructions from the Company.
(6) Any of the Agent and the Paying Agents and their officers, directors
and employees may become the owner of, or acquire any interest in, any Notes,
Receipts, Coupons or Talons with the same rights that it, he or she would have
if the Agent or the relevant Paying Agent, as the case may be, concerned were
not appointed hereunder, and may engage or be interested in any financial or
other transaction with the Company and may act on, or as depositary, trustee
or agent for, any committee or body of holders of Notes or Coupons or in
connection with any other obligations of the Company as freely as if the Agent
or the relevant Paying Agent, as the case may be, were not appointed
hereunder.
(7) The Company shall provide the Agent with a certified copy of the list
of persons authorized to execute documents and take action on behalf of the
Company in connection with this Agreement and shall notify the Agent promptly
in writing if any of such persons ceases to be so authorized or if any
additional person becomes so authorized together, in the case of an additional
authorized person, with evidence satisfactory to the Agent that such person
has been so authorized.
20. Communication Between the Parties
---------------------------------
A copy of all communications relating to the subject matter of this Agreement
between the Company and any holders of Notes, Receipts or Coupons and any of
the Paying Agents shall be sent to the Agent by the relevant Paying Agent and
the Agent shall forthwith promptly deliver a copy of any such communication to
the Company.
21. Changes in Agent and Paying Agents
----------------------------------
(1) The Company agrees that, until no Note is outstanding or until moneys
for the payment of all amounts in respect of all outstanding Notes have been
made available to the Agent (whichever is the later):
(a) so long as any Notes (i) are listed on the London Stock
Exchange, there will at all times be a Paying Agent (or the Agent) having a
specified office in London; (ii) are listed on the Paris Bourse, there will at
all times be a Paying Agent having a specified office in Paris; and (iii) are
listed on any other Stock Exchange, there will at all times be a Paying Agent
in any such location as may be required by the rules and regulations of the
relevant Stock Exchange;
20
<PAGE>
(b) there will at all times be a Paying Agent (or the Agent) with a
specified office in a city approved by the Company and the Agent in
continental Europe; and
(c) there will at all times be an Agent.
In addition, the Company shall appoint a Paying Agent having a specified
office in New York City in the circumstances described in the final paragraph
of Condition 6(b). Any variation, termination, appointment or change shall
only take effect (other than in the case of insolvency, when it shall be of
immediate effect) after not less than 30 nor more than 45 days prior notice
thereof shall have been given to the Noteholders in accordance with Condition
16.
(2) The Agent may (subject as provided in Subclause 21(4)) at any time
resign as Agent by giving written notice to the Company of such intention on
its part, specifying the date on which its desired resignation shall become
effective; provided that such date shall never be less than three months after
the receipt of such notice by the Company unless the Company agrees to accept
less notice.
(3) The Agent may (subject as provided in Subclause 21(4)) be removed at
any time by the filing with it of an instrument in writing signed on behalf of
the Company specifying such removal and the date when it shall become
effective.
(4) Any resignation under Subclause 21(2) or removal under Subclause
21(3) shall only take effect upon the appointment by the Company of a
successor Agent and (other than in cases of insolvency of the Agent) on the
expiry of the notice to be given under Clause 23. If, by the day falling 10
days before the expiry of any notice under Subclause 21(2), the Company has
not appointed a successor Agent, then the Agent shall be entitled, on behalf
of the Company, to appoint as a successor Agent in its place such reputable
financial institution of good standing as it may reasonably determine to be
capable of performing the duties of the Agent hereunder.
(5) In case at any time the Agent resigns, or is removed, or becomes
incapable of action or is adjudged bankrupt or insolvent, or files a voluntary
petition in bankruptcy or makes an assignment for the benefit of its creditors
or consents to the appointment of an administrator, liquidator or
administrative or other receiver of all or a substantial part of its property,
or if an administrator, liquidator or administrative or other receiver of it
or all or a substantial part of its property is appointed, or it admits in
writing its inability to pay or meet its debts as they become due, or if an
order of any court is entered approving any petition filed by or against it
under the provisions of any applicable bankruptcy or insolvency law or if any
officer takes charge or control of it or of its property or affairs for the
purpose of rehabilitation, administration or liquidation, a successor Agent
may be appointed by the Company by an instrument in writing filed with the
successor Agent. Upon the appointment as aforesaid of a successor Agent and
acceptance by the latter of such appointment and (other than in the case of
insolvency of the Agent) upon expiry of the notice to be given under Clause
23, the Agent so superseded shall cease to be the Agent hereunder.
21
<PAGE>
(6) Subject to Subclause 21(1), the Company may, after prior consultation
with the Agent, terminate the appointment of any of the Paying Agents at any
time and/or appoint one or more further Paying Agents located outside the
United States (either for all Notes issued under the Program or with respect
to a particular Series of Notes) by giving to the Agent, and to the relevant
Paying Agent, at least 45 days notice in writing to that effect, or such
lesser notice as is agreed to by the Agent, the Company and the relevant
Paying Agent.
(7) Subject to Subclause 21(1), all or any of the Paying Agents may
resign their respective appointments hereunder at any time by giving the
Company and the Agent at least 45 days written notice to that effect.
(8) Upon its resignation or removal becoming effective, the Agent or the
relevant Paying Agent:
(a) shall, in the case of the Agent, forthwith transfer all moneys
held by it hereunder and the records referred to in Subclauses 13(5) and 14(7)
to the successor Agent hereunder; and
(b) shall be entitled to the payment by the Company of its
commissions and fees for the services theretofore rendered hereunder in
accordance with the terms of Clause 16 and to the reimbursement of all
reasonable out-of-pocket expenses (including legal fees and together with any
applicable value added tax or similar tax thereon) incurred in connection
therewith.
(9) Upon its appointment becoming effective, a successor Agent and any
new Paying Agent shall, without further act, deed or conveyance, become vested
with all the authority, rights, powers, trust, immunities, duties and
obligations of such predecessor with like effect as if originally named as
Agent or (as the case may be) a Paying Agent hereunder.
22. Merger and Consolidation
------------------------
Any corporation into which the Agent or any Paying Agent may be merged, or any
corporation with which the Agent or any of the Paying Agents may be
consolidated, or any corporation resulting from any merger or consolidation to
which the Agent or any of the Paying Agents shall be a party, or any
corporation to which the Agent or any of the Paying Agents shall sell or
otherwise transfer all or substantially all the assets of the Agent or any
Paying Agent shall, on the date when such merger, consolidation or transfer
becomes effective and to the extent permitted by any applicable laws, become
the successor Agent or, as the case may be, Paying Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
the parties hereto, unless otherwise required by the Company, and after the
said effective date all references in this Agreement to the Agent or, as the
case may be, such Paying Agent shall be deemed to be references to such
corporation. Notice of any such merger, consolidation or transfer shall
forthwith be given to the Company by the relevant Agent or Paying Agent.
22
<PAGE>
23. Notifications
-------------
Following receipt of notice of resignation from the Agent or any Paying Agent
and forthwith upon appointing a successor Agent or, as the case may be,
further or other Paying Agents for any Series of Notes outstanding prior to
the date of such appointment or on giving notice to terminate the appointment
of any Agent or, as the case may be, Paying Agent, the Company shall give or
cause to be given not more than 45 days nor less than 30 days notice thereof
to any Noteholders affected by such termination or appointment in accordance
with the Conditions.
24. Change of Specified Office
--------------------------
If the Agent or any Paying Agent determines to change its specified office, it
shall give to the Company and (if applicable) the Agent written notice of such
determination giving the address of the new specified office which shall be in
the same city and stating the date on which such change is to take effect,
which shall not be less than 45 days thereafter. The Agent (on behalf of the
Company) shall within 15 days of receipt of such notice (unless the
appointment of the Agent or the relevant Paying Agent, as the case may be, is
to terminate pursuant to Clause 21 on or prior to the date of such change)
give or cause to be given not more than 45 days nor less than 30 days notice
thereof to the Noteholders in accordance with the Conditions; provided,
however, that if a Paying Agent acts as Paying Agent for only some of the
Series of Notes under the Program, notice need be given only to Noteholders
for whom the Paying Agent acts as Paying Agent.
25. Notices
-------
Any notice or communication given hereunder shall be sufficiently given or
served:
(a) if delivered in person to the relevant address specified on the
signature pages hereof and, if so delivered, shall be deemed to have been
delivered at time of receipt;
(b) if sent by facsimile or telex to the relevant number specified on the
signature pages hereof and, if so sent, shall be deemed to have been delivered
upon transmission provided such transmission is confirmed by the answer back
of the recipient (in the case of telex) or when an acknowledgment of receipt
is received (in the case of facsimile).
26. Taxes and Stamp Duties
----------------------
The Company agrees to pay any and all stamp and other documentary taxes or
duties (other than any interest or penalties arising as a result of a failure
by any other person to account promptly to the relevant authorities for any
such duties or taxes after such person shall have
received from the Company the full amount payable in respect thereof) which
may be payable in connection with the execution, delivery, performance and
enforcement of this Agreement.
23
<PAGE>
27. Currency Indemnity
------------------
If, under any applicable law and whether pursuant to a judgment being made or
registered against the Company or for any other reason, any payment under or
in connection with this Agreement is made or is to be satisfied in a currency
(the "other currency") other than that in which the relevant payment is
expressed to be due (the "required currency") under this Agreement, then, to
the extent that the payment (when converted into the required currency at the
rate of exchange on the date of payment or, if it is not practicable for the
Agent or the relevant Paying Agent to purchase the required currency with the
other currency on the date of payment, at the rate of exchange as soon
thereafter as it is practicable for it to do so or, in the case of a
liquidation, insolvency or analogous process at the rate of exchange on the
latest date permitted by applicable law for the determination of liabilities
in such liquidation, insolvency or analogous process) actually received by the
Agent or the relevant Paying Agent falls short of the amount due under the
terms of this Agreement, the Company shall, as a separate and independent
obligation, indemnify and hold harmless the Agent against the amount of such
shortfall.
For the purposes of this Clause 27, "rate of exchange" means the rate at which
the Agent is able on the relevant date to purchase the required currency with
the other currency and shall take into account any premium and other costs of
exchange.
28. Amendments; Meetings of Holders
-------------------------------
(1) This Agreement, the Notes and any Receipts and Coupons attached to
the Notes may be amended by the Company and the Agent, without consent of the
holder of any Note, Receipt or Coupons (a) for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective provision
contained herein or therein, or to evidence the succession of another
corporation to the Company as provided in Condition 11, (b) to make any
further modifications of the terms of this Agreement necessary or desirable to
allow for the issuance of any additional Notes (which modifications shall not
be materially adverse to holders of outstanding Notes), or (c) in any manner
which the Company (and, in the case of this Agreement, the Agent) may deem
necessary or desirable and which shall not materially adversely affect the
interests of the holders of the Notes, Receipts and Coupons. In addition,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Notes then outstanding affected thereby, or by a
resolution adopted by a majority in aggregate principal amount of such
outstanding Notes affected thereby present or represented at a meeting of such
holders at which a quorum is present, this Agreement and the terms and
conditions of the Notes, Receipts and Coupons may be modified or amended by
the parties hereto, and future compliance and past defaults waived, in each
case as provided in Conditions 12 and 13 and subject to the limitations
therein provided.
(2) A meeting of holders of Notes may be called by the holders of at
least 10 per cent in principal amount of the Outstanding Notes at any time and
from time to time to make, give or take any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Agreement
or the Notes to be made, given or taken by holders of Notes.
24
<PAGE>
(3) The Agent may at any time call a meeting of holders of Notes for any
purpose specified in Subclause 28(1) to be held at such time and at such place
in The City of New York or in London, as the Agent and the Company shall
determine. Notice of every meeting of holders of Notes, setting forth the
time and the place of such meeting and in general terms the action proposed to
be taken at such meeting, shall be given by the Agent to the Company and to
the holders of the Notes, in the same manner as provided in Condition 16, not
less than 21 nor more than 180 days prior to the date fixed for the meeting.
In the case at any time the Company or the holders of at least 10 per cent in
principal amount of the outstanding Notes shall have requested the Agent to
call a meeting of the holders to take any action authorized in Subclause
28(1), by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Agent shall not have given notice
of such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then
the Company, or the holders of Notes in the amount above-specified, as the
case may be, may determine the time and the place in The City of New York or
London for such meeting and may call such meeting by giving notice thereof as
provided in this Subclause 28(3).
(4) To be entitled to vote at any meeting of holders of Notes, a person
shall be a holder of outstanding Notes at the time of such meeting, or a
person appointed by an instrument in writing as proxy for such holder.
(5) The persons entitled to vote a majority in principal amount of the
outstanding Notes shall constitute a quorum. In the absence of a quorum,
within 30 minutes of the time appointed for any such meeting, the meeting may
be adjourned for a period of not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting may
be further adjourned for a period of not less than 10 days as determined by
the chairman of the meeting prior to the adjournment of such adjourned
meeting. Notice of the reconvening of any adjourned meeting shall be given as
provided in Subclause 28(3) except that such notice need be given not less
than five days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage of the principal amount of the outstanding Notes
which shall constitute a quorum.
Subject to the foregoing, at the reconvening of any meeting adjourned for a
lack of a quorum, the persons entitled to vote 25 per cent. in principal
amount of the outstanding Notes shall constitute a quorum for the taking of
any action set forth in the notice of the original meeting. Any meeting of
holders of Notes at which a quorum is present may be adjourned from time to
time by vote of a majority in principal amount of the outstanding Notes
represented at the meeting, and the meeting may be held as so adjourned
without further notice. At a meeting or an adjourned meeting duly reconvened
and at which a quorum is present as aforesaid, any resolution and all matters
shall be effectively passed and decided if passed or decided by the persons
entitled to vote a majority in principal amount of the outstanding Notes
represented and voting at such meeting, provided that such amount approving
such resolution shall be not less than 25 per cent. in principal amount of the
outstanding Notes.
25
<PAGE>
(6) The Agent may make such reasonable regulations as it may deem
advisable for any meeting of holders of Notes in regard to proof of the
holding of Notes and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination
of proxies, certificates and other evidence of the right to vote, and such
other matters concerning the conduct of the meeting as it shall deem
appropriate. The Agent shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called
by the Company or holders of Notes as provided above, in which case the
Company or the holders of Notes calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
permanent secretary of the meeting shall be elected by vote of the persons
entitled to vote a majority in principal amount of the outstanding Notes
represented at the meeting. The chairman of the meeting shall have no right
to vote, except as a holder of Notes or proxy. A record, at least in
triplicate, of the proceedings of each meeting of holders of Notes shall be
prepared, and one such copy shall be delivered to the Company and another to
the Agent to be preserved by the Agent.
29. Calculation Agency Agreement
----------------------------
A form of calculation agency agreement is set out in Appendix C to this
Agreement. Where the Conditions require functions to be carried out by a
Calculation Agent other than the Agent, the Company may execute such an
agreement or an agreement in such other form as the Company and the
Calculation Agent may agree.
30. Descriptive Headings
--------------------
The descriptive headings in this Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
31. Governing Law
-------------
This Agreement is governed by, and shall be construed in accordance with, the
laws of the State of New York, United States of America, applicable to
agreements made and to be performed wholly within such jurisdiction.
32. Counterparts
------------
This Agreement may be executed in one or more counterparts all of which shall
constitute one and the same agreement.
26
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
The Company
- -----------
TOYOTA MOTOR CREDIT CORPORATION
19001 South Western Avenue
Torrance, California 90509
Telephone: (310) 618-6195
Fax: (310) 618-6194
Attention: Corporate Treasury Manager
By: /s/ George Borst
----------------------------------------------------------
George Borst
Senior Vice President and General Manager
The Agent
- ---------
The Chase Manhattan Bank
Trinity Tower
9 Thomas More Street
London E1 9YT
Telephone: 01202 347430
Fax: 01202 347438
Telex: 8954681 CMB G
Attention: Manager, Global Trust Services, Operations
By: /s/ Trevor J. Hearn
---------------------------------------------------------------
The Other Paying Agent
- ----------------------
Chase Manhattan Bank Luxembourg S.A.
5 Rue Plaetis
L-2338
Luxembourg
Telephone: 00 352 4626 85236
Fax: 00 352 4626 85380
Telex: 1233 CHASE LU
Attention: Manager, Global Trust Services, Operations
By: /s/ Trevor J. Hearn
---------------------------------------------------------------
27
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APPENDIX A
TERMS AND CONDITIONS OF THE NOTES
---------------------------------
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TERMS AND CONDITIONS OF THE NOTES
The following are the Terms and Conditions of the Notes issued on or after the
date of this Offering Circular which (subject to completion and amendment and
to the extent applicable) will be attached to or incorporated by reference
into each global Note and which will be incorporated by reference or endorsed
upon each definitive Note. The applicable Pricing Supplement in relation to
any Notes may specify other terms and conditions which shall, to the extent so
specified or to the extent inconsistent with the following Terms and
Conditions, replace or modify the following Terms and Conditions for the
purpose of such Notes.
This Note is one of a Series (as defined below) of Notes (the "Notes,"
which expression shall mean (i) in relation to any Notes represented by a
global Note, units of the lowest Specified Denomination in the Specified
Currency of the relevant Notes, (ii) definitive Notes issued in exchange (or
partial exchange) for a temporary or permanent global Note, and (iii) any
global Note) issued subject to, and with the benefit of, a Second Amended and
Restated Agency Agreement dated as of July 24, 1997, (the "Agency Agreement"),
and made between Toyota Motor Credit Corporation ("TMCC", which reference does
not include the subsidiaries of TMCC) and The Chase Manhattan Bank, London
Office, as issuing agent and (unless specified otherwise in the applicable
Pricing Supplement) principal paying agent and (unless specified otherwise in
the applicable Pricing Supplement) as calculation agent (the "Agent", which
expression shall include any successor agent or any other calculation agent
specified in the applicable Pricing Supplement) and the other paying agents
named therein (together with the Agent, the "Paying Agents", which expression
shall include any additional or successor paying agents).
Interest-bearing definitive Notes will (unless otherwise indicated in the
applicable Pricing Supplement) have interest coupons ("Coupons") and, if
indicated in the applicable Pricing Supplement, talons for further Coupons
("Talons") attached on issue. Any reference herein to Coupons or coupons
shall, unless the context otherwise requires, be deemed to include a reference
to Talons or talons. Definitive Notes repayable in installments will have
receipts ("Receipts") for the payment of the installments of principal (other
than the final installment) attached on issue.
As used herein, "Series" means all Notes which are denominated in the same
currency and which have the same Maturity Date, Interest/Payment Basis and
interest payment dates (if any) (all as indicated in the applicable Pricing
Supplement) and the terms of which (except for the Issue Date or the Interest
Commencement Date (as the case may be) and/or the Issue Price (as indicated as
aforesaid)) are otherwise identical (including whether or not the Notes are
listed) and the expressions "Notes of the relevant Series" and "holders of
Notes of the relevant Series" and related expressions shall be construed
accordingly. As used herein, "Tranche" means all Notes of the same Series with
the same Issue Date and Interest Commencement Date (if applicable).
If indicated in the applicable Pricing Supplement, TMCC may, from time to
time without the consent of the holders of Notes of a Series, create and issue
further Notes of the same Series.
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The Pricing Supplement applicable to any particular Note or Notes is
attached hereto or endorsed hereon and supplements these Terms and Conditions
and may specify other terms and conditions which shall, to the extent so
specified or to the extent inconsistent with these Terms and Conditions,
replace or modify these Terms and Conditions for the purposes of such Note or
Notes. References herein to the "applicable Pricing Supplement" shall mean the
Pricing Supplement attached hereto or endorsed hereon.
Copies of the Agency Agreement (which contains the form of Pricing
Supplement) and the Pricing Supplement applicable to any particular Note or
Notes (if listed) are available for inspection at the specified offices of the
Agent and each of the other Paying Agents. The holders of the Notes (the
"Noteholders"), which expression shall, in relation to any Notes represented
by a global Note, be construed as provided in Condition 1, the holders of the
Coupons (the "Couponholders") and the holders of Receipts (the
"Receiptholders") are deemed to have notice of, and are entitled to the
benefit of, all the provisions of the Agency Agreement and the applicable
Pricing Supplement, which are binding on them.
A temporary or permanent global Note will be exchangeable in whole, but
not in part, for security printed definitive Notes with, where applicable,
Receipts, Coupons and Talons attached not earlier than the date (the "Exchange
Date") which is 40 days after the date on which the temporary global Note is
issued (provided that certification of non-U.S. beneficial ownership has been
received): (i) at the option of TMCC; (ii) unless stated otherwise in the
applicable Pricing Supplement, at the option of holders of an interest in the
temporary or permanent global Note upon such notice as is specified in the
applicable Pricing Supplement from Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System ("Euroclear") or Cedel
Bank, societe anonyme ("Cedel Bank") (as the case may be) acting on
instructions of the holders of interest in the temporary or permanent global
Note and/or subject to the payment of costs in connection with the printing
and distribution of the definitive Notes, if specified in the applicable
Pricing Supplement; (iii) if, after the occurrence of an Event of Default,
holders representing at least a majority of the outstanding principal amount
of the Notes of a Series, acting together as a single class, advise the Agent
through Euroclear and Cedel Bank that they wish to receive definitive Notes;
or (iv) Euroclear, Cedel Bank and any other relevant clearance system for the
temporary or permanent global Note are all no longer willing or able to
discharge properly their responsibilities with respect to such Notes and the
Agent and TMCC are unable to locate a qualified successor.
Words and expressions defined in the Agency Agreement, defined elsewhere
in the Offering Circular or used in the applicable Pricing Supplement shall
have the same meanings where used in these Terms and Conditions unless the
context otherwise requires or unless otherwise stated.
1. FORM, DENOMINATION AND TITLE
The Notes in this Series are in bearer form and, in the case of definitive
Notes, serially numbered in the Specified Currency and in the Specified
Denomination(s) specified in the applicable Pricing Supplement.
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This Note is a Fixed Rate Note, a Floating Rate Note, a Zero Coupon Note,
a Dual Currency Note or an Indexed Note or any combination of the foregoing,
depending upon the Interest/Payment Basis specified in the applicable Pricing
Supplement. It is also a Partly Paid Note and/or an Indexed Note (where
payment with respect to principal is linked to an Index and/or formula) if, in
each case, the applicable Pricing Supplement so indicates and the appropriate
provisions of these Terms and Conditions will apply accordingly.
Notes in definitive form are issued with Coupons attached, unless they are
Zero Coupon Notes in which case references to interest (other than interest
due after the Maturity Date), Coupons and Couponholders in these Terms and
Conditions are not applicable.
Except as set out below, title to the Notes, Receipts and Coupons will
pass by delivery. TMCC and any Paying Agent may deem and treat the bearer of
any Note, Receipt or Coupon as the absolute owner thereof (whether or not
overdue and notwithstanding any notice of ownership or writing thereon or
notice of any previous loss or theft thereof) for all purposes but, in the
case of any global Note, without prejudice to the provisions set out in the
next succeeding paragraph.
For so long as any of the Notes are represented by a global Note, each
person who is for the time being shown in the records of Euroclear or of Cedel
Bank and any other additional or alternative clearance system, including
Sicovam, as the holder of a particular principal amount of Notes other than a
clearing agency (including Cedel Bank and Euroclear) that is itself an account
holder of Cedel Bank, Euroclear or any other applicable clearing agency for a
Series of Notes (in which regard any certificate or other document issued by
Euroclear or Cedel Bank as to the principal amount of such Notes standing to
the account of any person shall be conclusive and binding for all purposes
except in the case of manifest error) shall be treated by TMCC, the Agent and
any other Paying Agent as the holder of such principal amount of such Notes
for all purposes other than with respect to the payment of principal or
interest on the Notes, the right to which shall be vested, as against TMCC,
the Agent and any other Paying Agent solely in the bearer of the relevant
global Note in accordance with and subject to its terms (and the expressions
"Noteholder" and "holder of Notes" and related expressions shall be construed
accordingly). Notes which are represented by a global Note will be
transferable only in accordance with the rules and procedures for the time
being of Euroclear or of Cedel Bank, as the case may be.
Any reference herein to Euroclear and/or Cedel Bank shall, whenever the
context so permits, be deemed to include a reference to any additional or
alternative clearance system (including, if applicable, Sicovam S.A., and the
intermediaires financiers habilites authorized to maintain accounts therein
(together "Sicovam")) approved by TMCC and the Agent.
If the specified Currency of this Note is a currency of one of the member
states of the European Union, and if the applicable Pricing Supplement
specifies that this Note will include a Redenomination Clause (a
"Redenomination Clause") providing for the redemption of this Note in Euro
rather than (or in addition to) the Specified Currency, the wording of the
Redenomination Clause will be set out in full in the applicable Pricing
Supplement.
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2. STATUS OF NOTES
The Notes will be unsecured general obligations of TMCC and will rank
pari passu with all other unsecured and unsubordinated indebtedness for
borrowed money of TMCC from time to time outstanding.
3. VALUE AND COMPOSITION OF THE ECU
If the Notes are denominated in ECU, the value and composition of the ECU
in which the Notes are denominated or, if the Notes are Dual Currency Notes
payable in ECU, the value and composition of the ECU in which the Notes are
payable ("ECU"), will be the same as the value and composition of the European
Currency Unit that is from time to time used as the unit of account of the
European Communities (the "EC"). Certain changes as to the nature or
composition of the ECU may be made by the EC in conformity with the provisions
of the Treaty on European Union. References herein to the ECU shall be deemed
to be references to the ECU as so changed.
4. INTEREST
(a) INTEREST ON FIXED RATE NOTES
(i) Each Fixed Rate Note bears interest on its principal amount from
(and including) the Interest Commencement Date which is specified in the
applicable Pricing Supplement at the rate(s) per annum equal to the Fixed
Rate(s) of Interest specified in the applicable Pricing Supplement payable in
arrears on the Fixed Interest Date(s) in each year and on the Maturity Date so
specified if it does not fall on a Fixed Interest Date. The first payment of
interest shall be made on the Fixed Interest Date next following the Interest
Commencement Date and, if the first anniversary of the Interest Commencement
Date is not a Fixed Interest Date, will amount to the Initial
Broken Amount specified in the applicable Pricing Supplement. If the Maturity
Date is not a Fixed Interest Date, interest from (and including) the preceding
Fixed Interest Date (or the Interest Commencement Date) to (but excluding) the
Maturity Date will amount to the Final Broken Amount specified in the
applicable Pricing Supplement. Unless specified otherwise in the applicable
Pricing Supplement, the "Following Business Day Convention" will apply to the
payment of all Notes other than Floating Rate Notes, meaning that if the Fixed
Interest Date or Maturity Date would otherwise fall on a day which is not a
Business Day (as defined in Condition 4(b)(i) below), 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. If the "Modified Following Business
Day Convention" is specified in the applicable Pricing Supplement for any Note
(other than a Floating Rate Note), it shall mean that if the Fixed Interest
Date or Maturity Date would otherwise fall on a day which is not a Business
Day (as defined in Condition 4(b)(i) below), 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 unless it would thereby fall into the next calendar
month in which event the full amount of payment shall be made on the
immediately preceding Business Day. The accrual periods for calculating the
amount of interest due on the Maturity Date and, unless specified otherwise in
the applicable Pricing Supplement, any Fixed Interest Date shall not be
changed.
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(ii) If interest is required to be calculated for a period of less
than a full year, such interest shall be calculated on the basis of a 360-day
year consisting of 12 months of 30 days each and, in the case of an incomplete
month, the number of days elapsed or as otherwise specified in the applicable
Pricing Supplement.
(b) INTEREST ON FLOATING RATE NOTES
(i) Interest Payment Dates
Each Floating Rate Note bears interest on its principal amount (or, if it
is a Partly Paid Note, the amount paid up) from (and including) the Interest
Commencement Date specified in the applicable Pricing Supplement and, unless
specified otherwise in the applicable Pricing Supplement, such interest will
be payable in arrears on each interest payment date (each an "Interest Payment
Date") in each year and on the Maturity Date so specified if it does not fall
on an Interest Payment Date. Unless specified otherwise in the applicable
Pricing Supplement, the "Modified Following Business Day Convention with
adjustment for period end dates" will apply to Floating Rate Notes, meaning
that if any Interest Payment Date or the Maturity Date would otherwise fall on
a day which is not a Business Day (as defined below), it shall be postponed to
the next day which is a Business Day unless it would thereby fall into the
next calendar month in which event the Interest Payment Date or the Maturity
Date shall be brought forward to the immediately preceding Business Day and
the accrual periods for calculating the amount of interest due on any Interest
Payment Date (but not the Maturity Date) shall be changed. If the "Following
Business Day Convention with adjustment for period end dates" is specified in
the applicable Pricing Supplement with respect to Floating Rate Notes, it
shall mean that if any Interest Payment Date or Maturity Date would otherwise
fall on a day which is not a Business Day (as defined below), it shall be
postponed to the next day which is a Business Day and the accrual periods for
calculating the amount of interest due on any Interest Payment Date (but not
the Maturity Date) shall be changed. If the accrual periods for
calculating the amount of interest due on any Interest Payment Date falls on a
day which is not a Business Day (as defined below), this will be specified in
the Pricing Supplement by the notation "no adjustment for period end dates."
(The number of months or other period from (and including) the Interest
Commencement Date to (but excluding) the first Interest Payment Date and from
(and including) that and each successive Interest Payment Date thereafter to
(but excluding) the next following Interest Payment Date shall be referred to
as an "Interest Period", which may or may not be the same number of months or
other period throughout the life of the Notes.)
In this Condition 4, "Business Day" means (unless otherwise stated in the
applicable Pricing Supplement) a day which is both:
(A) a day (other than a Saturday or a Sunday) on which
commercial banks and foreign exchange markets settle payments in London
and/or any other location specified in the applicable Pricing Supplement;
and
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(B) either (1) in relation to Notes denominated in a Specified
Currency other than ECU, a day on which commercial banks and foreign exchange
markets settle payments in the principal financial center of the country of
the relevant Specified Currency (if other than London) or (2) in relation to
Notes denominated in ECU, an ECU Settlement Date (as defined in the 1991 ISDA
Definitions, as amended and updated as of the Issue Date of this Note,
published by the International Swaps and Derivatives Association, Inc. (the
"ISDA Definitions")). Unless otherwise provided in the applicable Pricing
Supplement, the principal financial center of any country for the purpose of
these Terms and Conditions shall be as provided in the ISDA Definitions
(except in the case of New Zealand and Australia, where the principal
financial center will be as specified in the Pricing Supplement).
(ii) Rate of Interest
The Rate of Interest payable from time to time in respect of each
Series of Floating Rate Notes shall be determined in the manner specified in
the applicable Pricing Supplement.
(iii) ISDA Determination
(A) Where ISDA Determination is specified in the applicable
Pricing Supplement as the manner in which the Rate of Interest is to be
determined, the Rate of Interest shall be determined on such dates and at such
rates as would have been determined by TMCC if it had entered into an interest
rate swap transaction governed by an agreement (regardless of any event of
default or termination event thereunder) in the form of the 1992 ISDA Master
Agreement (Multicurrency - Cross Border) (the "ISDA Agreement") (copyright
1992) and evidenced by a Confirmation (as defined in the ISDA Agreement)
incorporating the ISDA Definitions with the holder of the relevant Note under
which:
(1) the manner in which the Rate of Interest is to be
determined is the "Floating Rate Option";
(2) TMCC is the "Floating Rate Payer";
(3) the Agent or other person specified in the applicable
Pricing Supplement is the "Calculation Agent";
(4) the Interest Commencement Date is the "Effective Date";
(5) the aggregate principal amount of the Series is the
"Notional Amount";
(6) the relevant Interest Period is the "Designated
Maturity";
(7) the Interest Payment Dates are the "Floating Rate Payer
Payment Dates";
(8) the Margin is the "Spread"; and
(9) all other terms are as specified in the applicable
Pricing Supplement.
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(B) When Condition 4(b)(iii)(A) applies, with respect to each
relevant Interest Payment Date:
(1) the amount of interest determined for such Interest
Payment Date shall be the Interest Amount for the relevant Interest Period for
the purposes of these Terms and Conditions as though calculated under
Condition 4(b)(vi) below; and
(2) the Rate of Interest for such Interest Period shall be
the Floating Rate (as defined in the ISDA Definitions) determined by the Agent
(or such other agent specified in the applicable Pricing Supplement) in
accordance with Condition 4(b)(iii)(A), plus or minus (as indicated in the
applicable Pricing Supplement), the applicable Margin (if any).
(iv) Screen Determination
Screen Rate Determination: Where Screen Rate Determination is specified in the
applicable Pricing Supplement as the manner in which the Rate of Interest is
to be determined, the Rate of Interest for each Interest Period will be
either:
(x) the quotation; or
(y) the arithmetic mean (rounded, if necessary, to the fourth decimal
place with 0.00005 being rounded upwards) of the offered quotations,
(expressed as a percentage rate per annum), for deposits in the Specified
Currency for that Interest Period which appears or appear, as the case may be,
on the appropriate page of the Screen as at 11:00 a.m. (London time) on the
Interest Determination Date (as defined below) in question plus or minus (as
specified in the applicable Pricing Supplement) the Margin (if any), all as
determined by the Agent;
(A) if, in the case of (x) above, no such rate appears or, in
the case of (y) above, fewer than two of such offered rates appear at such
time or if the offered rate or rates which appears or appear, as the case may
be, as at such time do not apply to a period of a duration equal to the
relevant Interest Period, the Rate of Interest for such Interest Period
shall, subject as provided below and except as otherwise indicated in the
applicable Pricing Supplement, be the arithmetic mean (rounded, if necessary,
to the fourth decimal place with 0.00005 being rounded upwards) of the
offered quotations (expressed as a percentage rate per annum), of which the
Agent is advised by all Reference Banks (as defined below) as at 11:00 a.m.
(London time) on the Interest Determination Date plus or minus (as specified
in the applicable Pricing Supplement) the Margin (if any), all as determined
by the Agent;
(B) except as otherwise indicated in the applicable Pricing
Supplement, if on any Interest Determination Date to which Condition
4(b)(iv)(A) applies two or three only of the Reference Banks advise the Agent
of such offered quotations, the Rate of Interest for the next Interest Period
shall, subject as provided below, be determined as in Condition 4(b)(iv)(A) on
the basis of the rates of those Reference Banks advising such offered
quotations;
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(C) if on any Interest Determination Date to which Condition
4(b)(iv)(A) applies one only or none of the Reference Banks advises the Agent
of such rates, the Rate of Interest for the next Interest Period shall,
subject as provided below and except as otherwise indicated in the applicable
Pricing Supplement, be whichever is the higher of:
(1) the Rate of Interest in effect for the last preceding
Interest Period to which Condition 4(b)(iv)(A) shall have applied (plus or
minus (as specified in the applicable Pricing Supplement), where a different
Margin is to be applied to the next Interest Period than that which applied
to the last preceding Interest Period, the Margin relating to the next
Interest Period in place of the Margin relating to the last preceding Interest
Period); or
(2) the reserve interest rate (the "Reserve Interest Rate")
which shall be the rate per annum which the Agent determines to be either (x)
the arithmetic mean (rounded, if necessary, to the fourth decimal place with
0.00005 being rounded upwards) of the lending rates for the Specified Currency
which banks selected by the Agent in the principal financial center of the
country of the Specified Currency (which, if Australian dollars, shall be
Sydney and if New Zealand dollars, shall be Wellington) are quoting on the
relevant Interest Determination Date for the next Interest Period to the
Reference Banks or those of them (being at least two in number) to which such
quotations are, in the opinion of the Agent, being so made plus or minus (as
specified in the applicable Pricing Supplement) the Margin (if any), or (y) in
the event that the Agent can determine no such arithmetic mean, the lowest
lending rate for the Specified Currency which banks selected by the Agent in
the principal financial center of the country of the Specified Currency
(which, if Australian dollars, shall be Sydney and if New Zealand dollars,
shall be Wellington) are quoting on such Interest Determination Date to
leading European banks for the next Interest Period plus or minus (as
specified in the applicable Pricing Supplement) the Margin (if any), provided
that if the banks selected as aforesaid by the Agent are not quoting as
mentioned above, the Rate of Interest shall be the Rate of Interest specified
in (1) above;
(D) the expression "the appropriate page of the Screen" means
such page, whatever its designation, on which London Interbank Offered Rates
or, if there is only one such rate, that rate for deposits in the Specified
Currency of prime banks that are for the time being displayed on the Reuters
Monitor Money Rates Service or the appropriate Associated Press-Dow Jones
Tele-rate Service, as specified in the applicable Pricing Supplement;
(E) unless otherwise specified in the applicable Pricing
Supplement, the Reference Banks will be the principal London offices of The
Chase Manhattan Bank, National Westminster Bank PLC, Swiss Bank Corporation
and The Bank of Tokyo, Ltd. TMCC shall procure that, so long as any Floating
Rate Note to which Condition 4(b)(iv)(A) is applicable remains outstanding, in
the case of any bank being unable or unwilling to continue to act as a
Reference Bank, TMCC shall specify the London office of some other leading
bank engaged in the Eurodollar market to act as such in its place;
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(F) the expression "Interest Determination Date" means, unless
otherwise specified in the applicable Pricing Supplement, (x) other than in
the case of Condition 4(b)(iv)(A), with respect to Notes denominated in any
Specified Currency other than Sterling, the second Banking Day in London prior
to the commencement of the relevant Interest Period and, in the case of
Condition 4(b)(iv)(A), the second Banking Day in the principal financial
center of the country of the Specified Currency (which, if Australian dollars,
shall be Sydney and if New Zealand dollars, shall be Wellington) prior to the
commencement of the relevant Interest Period and (y) with respect to Notes
denominated in Sterling, the first Banking Day in London of the relevant
Interest Period; and
(G) the expression "Banking Day" means, in respect of any place,
any day on which commercial banks are open for business (including dealings in
foreign exchange and foreign currency deposits) in that place or, as the case
may be, as indicated in the applicable Pricing Supplement.
(v) Minimum and/or maximum Rate of Interest
If the applicable Pricing Supplement specifies a minimum Rate of Interest for
any Interest Period, then in no event shall the Rate of Interest for such
period be less than such minimum Rate of Interest. If the applicable Pricing
Supplement specifies a maximum Rate of Interest for any Interest Period, then
in no event shall the Rate of Interest for such Interest Period be greater
than such maximum Rate of Interest.
(vi) Determination of Rate of Interest and calculation of Interest
Amount
The Agent will, at or as soon as practicable after each time at which the Rate
of Interest is to be determined, determine the Rate of Interest (subject to
any minimum or maximum Rate of Interest specified in the applicable Pricing
Supplement) and calculate the amount of interest (the "Interest Amount")
payable on the Floating Rate Notes in respect of each Specified Denomination
for the relevant Interest Period. Each Interest Amount shall be calculated by
applying the Rate of Interest to the Specified Denomination, multiplying such
product by the actual number of days in the Interest Period concerned divided
by 360 (or 365/366 in the case of Floating Rate Notes denominated in
Sterling), or such other denominator determined by the Agent to be customary
for such calculation or otherwise specified in the applicable Pricing
Supplement, and rounding the result and figure to the nearest cent (or its
approximate equivalent in the relevant other Specified Currency), half a cent
(or its approximate equivalent in the relevant other Specified Currency) being
rounded upwards. Without prejudice to subparagraph (viii) below, the
determination of the Rate of Interest and calculation of each Interest Amount
by the Agent shall (in the absence of manifest error) be binding on all
parties.
(vii) Notification of Rate of Interest and Interest Amount
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The Agent will notify or cause to be notified TMCC and any stock exchange on
which the relevant Floating Rate Notes are listed of the Rate of Interest and
each Interest Amount for each Interest Period and the relevant Interest
Payment Date and will cause the same to be published in accordance with
Condition 16 as soon as possible after their determination but in no event
later than the fourth London Business Day thereafter. Each Interest Amount and
Interest Payment Date so notified may subsequently be amended (or appropriate
alternative arrangements made by way of adjustment) without publication as
aforesaid in the event of an extension or shortening of the Interest Period in
accordance with the provisions hereof. Each stock exchange on which the
relevant Floating Rate Notes are for the time being listed will be promptly
notified of any such amendment. For the purposes of this subparagraph (vii),
the expression "London Business Day" means a day (other than a Saturday or a
Sunday) on which banks and foreign exchange markets are open for business in
London.
(viii) Certificates to be final
All certificates, communications, opinions, determinations, calculations,
quotations and decisions given, expressed, made or obtained for the purposes
of the provisions of this paragraph (b), by the Agent, shall (in the absence
of manifest error) be binding on TMCC, the Agent, the other Paying Agents and
all Noteholders, Receiptholders and Couponholders and (in the absence as
aforesaid) no liability to TMCC, the Noteholders, the Receiptholders or the
Couponholders shall attach to the Agent in connection with the exercise or
non-exercise by it of its powers, duties and discretions pursuant to such
provisions.
(ix) Limitations on Interest
In addition to any maximum Rate of Interest which may be applicable to any
Floating Rate Note pursuant to Condition 4(b)(v) above, the interest rate on
Floating Rate Notes shall 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.
(c) INDEXED NOTES AND DUAL CURRENCY NOTES
In the case of Indexed Notes or Dual Currency Notes, if the Rate of Interest
or amount of interest fails to be determined by reference to an index and/or a
formula or, as the case may be, an exchange rate, such Rate of Interest or
amount of interest payable shall be determined in the manner specified in the
applicable Pricing Supplement.
(d) ZERO COUPON NOTES
When a Zero Coupon Note becomes due and repayable prior to the Maturity Date
and is not paid when due, the amount due and repayable shall be the Amortized
Face Amount of such Note as determined in accordance with Condition 5(f)(iii).
As from the Maturity Date, any overdue principal of such Note shall bear
interest at a rate per annum equal to the Accrual Yield set forth in the
applicable Pricing Supplement.
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(e) PARTLY PAID NOTES
In the case of Partly Paid Notes (other than Partly Paid Notes which are Zero
Coupon Notes), interest will accrue as aforesaid on the paid up principal
amount of such Notes and otherwise as specified in the applicable Pricing
Supplement.
(f) ACCRUAL OF INTEREST
Each Note (or in the case of the redemption in part only of a Note, such part
to be redeemed) will cease to bear interest (if any) from the due date for its
redemption unless, upon due presentation thereof, payment of principal is
improperly withheld or refused. In such event, interest will continue to
accrue (as well after as before judgment) until whichever is the earlier of
(i) the day on which all sums due in respect of such Note up to that day are
received by or on behalf of the holder of such Note; and (ii) the day on which
the Agent has notified the holder thereof (either in accordance with Condition
16 or individually) of receipt of all sums due in respect thereof up to that
date.
5. REDEMPTION AND PURCHASE
(a) AT MATURITY
Unless previously redeemed or purchased and canceled as specified below, Notes
will be redeemed by TMCC at their Final Redemption Amount in the relevant
Specified Currency on the Maturity Date specified in the applicable Pricing
Supplement.
(b) REDEMPTION FOR TAX REASONS
TMCC may redeem the Notes of this Series as a whole but not in part at any
time at their Early Redemption Amount, together, if appropriate, with accrued
interest to but excluding the date fixed for redemption, if TMCC shall
determine that as a result of any change in or amendment to the laws (or any
regulations or rulings promulgated thereunder) of the United States of America
or of any political subdivision or taxing authority thereof or therein
affecting taxation, or any change in application or official interpretation of
such laws, regulations or rulings, which amendment or change is effective on
or after the latest Issue Date of the Notes of this Series, TMCC would be
required to pay Additional Amounts, as provided in Condition 9, on the
occasion of the next payment due in respect of the Notes of this Series.
The Notes of this Series are also subject to redemption as a whole but not in
part in the other circumstances described in Condition 9.
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Notice of intention to redeem Notes will be given at least once in accordance
with Condition 16 not less than 30 days nor more than 60 days prior to the
date fixed for redemption, provided that no such notice of redemption shall be
given earlier than 90 days prior to the effective date of such change or
amendment and that at the time notice of such redemption is given, such
obligation to pay such Additional Amounts remains in effect. From and after
any redemption date, if monies for the redemption of Notes shall have been
made available for redemption on such redemption date, such Notes shall cease
to bear interest, if applicable, and the only right of the holders of such
Notes and any Receipts or Coupons appertaining thereto shall be to receive
payment of the Early Redemption Amount and, if appropriate, all unpaid
interest accrued to such redemption date.
(c) PRICING SUPPLEMENT
The Pricing Supplement applicable to the Notes of this Series shall indicate
either:
(i) that the Notes of this Series cannot be redeemed prior to their
Maturity Date (except as otherwise provided in paragraph (b) above and in
Condition 13); or
(ii) that such Notes will be redeemable at the option of TMCC and/or
the holders of the Notes prior to such Maturity Date in accordance with the
provisions of paragraphs (d) and/or (e) below on the date or dates and at the
amount or amounts indicated in the applicable Pricing Supplement.
(d) REDEMPTION AT THE OPTION OF TMCC
If so specified in the applicable Pricing Supplement, TMCC may, having given:
(i) not more than 60 nor less than 30 days notice to the holders of
the Notes of this Series in accordance with Condition 16, or such other notice
as is specified in the applicable Pricing Supplement; and
(ii) not less than 15 days before the giving of the notice referred
to in (i) (or such other notice as is specified in the applicable Pricing
Supplement), notice to the Agent;
(which notice shall be irrevocable), repay all or some only of the Notes of
this Series then outstanding on the Optional Redemption Date(s) and at the
Optional Redemption Amount(s) indicated in the applicable Pricing Supplement
together, if appropriate, with accrued interest. In the event of a redemption
of some only of such Notes of this Series, such redemption must be for an
amount being the Minimum Redemption Amount or a Higher Redemption Amount, as
indicated in the applicable Pricing Supplement. In the case of a partial
redemption of definitive Notes of this Series, the Notes of this Series to be
repaid will be selected individually by lot not more than 60 days prior to the
date fixed for redemption and a list of the Notes of this Series called for
redemption will be published in accordance with Condition 16 not less than 30
days prior to such date. In the case of a partial redemption of Notes which
are represented by a global Note, the relevant Notes will be redeemed in
accordance with the rules of Euroclear and/or Cedel Bank. Notes denominated in
Sterling or French Franc Notes may not be redeemed pursuant to this paragraph
prior to one year from the Issue Date. Notes denominated in Deutsche Marks may
not be redeemed pursuant to this paragraph prior to two years from the Issue
Date.
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(e) REDEMPTION AT THE OPTION OF THE NOTEHOLDERS
Unless otherwise specified in the applicable Pricing Supplement, the Notes
will not be subject to repayment at the option of the Noteholders. Notes
denominated in Sterling or French Franc Notes may not be redeemed pursuant to
this paragraph prior to one year from the Issue Date. Notes denominated in
Deutsche Marks may not be redeemed pursuant to this paragraph prior to two
years from the Issue Date.
(f) EARLY REDEMPTION AMOUNTS
For the purposes of paragraph (b) above and Condition 13, Notes will be
redeemed at an amount (the "Early Redemption Amount") calculated as follows:
(i) in the case of Notes with a Final Redemption Amount equal to the
Issue Price, at the Final Redemption Amount thereof; or
(ii) in the case of Notes (other than Zero Coupon Notes) with a Final
Redemption Amount which is or may be greater or less than the Issue Price or
which is payable in a Specified Currency other than that in which the Notes
are denominated, at the amount set out in the applicable Pricing Supplement,
or if no such amount or manner is set out in the applicable Pricing
Supplement, at their principal amount; or
(iii) in the case of Zero Coupon Notes, at an amount (the "Amortized
Face Amount") equal to:
(A) the sum of (x) the Reference Price specified in the
applicable Pricing Supplement and (y) the product of the Accrual Yield
specified in the applicable Pricing Supplement (compounded annually) being
applied to the Reference Price from (and including) the Issue Date to (but
excluding) the date fixed for redemption or (as the case may be) the date upon
which such Note becomes due and repayable; or
(B) if the amount payable in respect of any Zero Coupon Note
upon redemption of such Zero Coupon Note pursuant to paragraph (b) above or
upon its becoming due and repayable as provided in Condition 13 is not paid or
available for payment when due, the amount due and repayable in respect of
such Zero Coupon Note shall be the Amortized Face Amount of such Zero Coupon
Note calculated as provided above as though the references in sub-paragraph
(A) to the date fixed for redemption or the date upon which the Zero Coupon
Note becomes due and repayable were replaced by references to the date (the
"Reference Date") which is the earlier of:
(1) the date on which all amounts due in respect of the
Note have been paid;
(2) the date on which the full amount of the moneys
repayable has been received by the Agent and notice to that effect has been
given in accordance with Condition 16.
The calculation of the Amortized Face Amount in accordance with this sub-
paragraph (B) will continue to be made, after as well as before judgment,
until the Reference Date unless the Reference Date falls on or after the
Maturity Date, in which case the amount due and repayable shall be the
principal amount of such Note together with interest at a rate per annum equal
to the Accrual Yield.
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Unless specified otherwise in the applicable Pricing Supplement, where any
such calculation is to be made for a period of less than a full year, it shall
be made on the basis of a 360-day year consisting of 12 months of 30 days each
(or 365/366 days in the case of Notes denominated in Sterling) and, in the
case of an incomplete month, the number of days elapsed.
(g) INSTALLMENTS
Any Note which is repayable in installments will be redeemed in the
Installment Amounts and on the Installment Dates specified in the applicable
Pricing Supplement.
(h) PARTLY PAID NOTES
If the Notes are Partly Paid Notes, they will be redeemed, whether at
maturity, early redemption or otherwise in accordance with the provisions of
this Condition 5 as amended or varied by the applicable Pricing Supplement.
(i) PURCHASES
TMCC may at any time purchase Notes of this Series (provided that, in the case
of definitive Notes, all unmatured Receipts and Coupons appertaining thereto
are surrendered therewith) in the open market at any price. If purchases are
made by tender, tenders must be available to all holders of Notes of this
Series alike.
(j) CANCELLATION
All Notes redeemed or purchased as aforesaid will be canceled forthwith,
together with all unmatured Receipts and Coupons attached thereto or
surrendered or purchased therewith, and may not be resold or reissued.
6. PAYMENTS
(a) METHOD OF PAYMENT
Subject as provided below, payments in a currency other than ECU will be made
by transfer to an account in the Specified Currency (which, in the case of a
payment in Yen to a non- resident of Japan, shall be a non-resident account)
maintained by the payee with, or by a check in the Specified Currency drawn
on, a bank (which, in the case of a payment in Yen to a non-resident of Japan,
shall be an authorized foreign exchange bank) in the principal financial
center of the country of such Specified Currency (which, if Australian
dollars, shall be Sydney and if New Zealand dollars, shall be Wellington);
provided, however, a check may not be delivered to an address in, and an
amount may not be transferred to an account at a bank located in, the United
States of America or its possessions by any office or agency of TMCC, the
Agent or any Paying Agent, except as provided in Condition 6(b).
Payments in ECU will be made by credit or transfer to an ECU account specified
by the payee.
Payments will be subject in all cases to any fiscal or other laws and
regulations applicable thereto in the place of payment, but without prejudice
to the provisions of Condition 9.
(b) PRESENTATION OF NOTES, RECEIPTS, COUPONS AND TALONS
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Payments of principal in respect of definitive Notes will (subject as provided
below) be made in the Specified Currency against surrender of definitive Notes
and payments of interest in respect of the definitive Notes will (subject as
provided below) be made in the Specified Currency against surrender of
Coupons, in each case at the specified office of any Paying Agent outside the
United States of America and its possessions.
In the case of definitive Notes, payments of principal with respect to
installments (if any), other than the final installment, will (subject as
provided below) be made against presentation and surrender of the relevant
Receipt. Each Receipt must be presented for payment of the relevant
installment together with the relevant definitive Note against which the
amount will be payable with respect to that installment. If any definitive
Note is redeemed or becomes repayable prior to the stated Maturity Date,
principal will be payable on surrender of such definitive Note together with
all unmatured Receipts appertaining thereto. Receipts presented without the
definitive Note to which they appertain and unmatured Receipts do not
constitute valid obligations of TMCC.
Upon the date on which any Fixed Rate Notes in definitive form (other than
Dual Currency Notes or Indexed Notes) become due and repayable, such Notes
should be presented for payment together with all unmatured Coupons
appertaining thereto failing which the amount of any missing unmatured Coupon
(or, in the case of payment not being made in full, the same proportion of the
aggregate amount of such missing unmatured Coupon as the sum so paid bears to
the sum due) will be deducted from the sum due for payment. Unless specified
otherwise in the applicable Pricing Supplement, each amount of principal so
deducted will be paid in the manner mentioned above against surrender of the
related missing Coupon at any time before the expiry of five years after the
Relevant Date (as defined in Condition 15) in respect of such principal
(whether or not such Coupon would otherwise have become void under Condition
15). Upon any Fixed Rate Note becoming due and repayable prior to its Maturity
Date, all unmatured Talons (if any) appertaining thereto will become void and
no further Coupons will be issued in respect thereof.
Upon the date on which any Floating Rate Note, Dual Currency Note or Indexed
Note in definitive form becomes due and repayable, all unmatured Coupons and
Talons (if any) relating thereto (whether or not attached) shall become void
and no payment shall be made in respect thereof.
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If the due date for redemption of any Note in definitive form is not a Fixed
Interest Date or an Interest Payment Date, interest (if any) accrued with
respect to such Note from and including the preceding Fixed Interest Date or
Interest Payment Date or, as the case may be, the Interest Commencement Date
shall be payable only against surrender of the relevant definitive Note.
Payments of principal and interest (if any) in respect of Notes of this Series
represented by any global Note will (subject as provided below) be made in the
manner specified above (except in the case of Notes denominated or payable in
ECU, when payments will be made as provided in Condition 6(c)) and otherwise
in the manner specified in the relevant global Note against presentation or
surrender, as the case may be, of such global Note at the specified office of
the Agent. A record of each payment made against presentation or surrender of
such global Note, distinguishing between any payment of principal and any
payment of interest, will be made on such global Note by the Agent and such
record shall be prima facie evidence that the payment in question has been
made.
The holder of the relevant global Note shall be the only person entitled to
receive payments in respect of Notes represented by such global Note and TMCC
will be discharged by payment to, or to the order of, the holder of such
global Note with respect to each amount so paid. Each of the persons shown in
the records of Euroclear or Cedel Bank as the holder of a particular principal
amount of Notes must look solely to Euroclear and/or Cedel Bank, as the case
may be, for his share of each payment so made by TMCC to, or to the order of,
the holder of the relevant global Note. No person other than the holder of the
relevant global Note shall have any claim against TMCC in respect of payments
due on that global Note.
Notwithstanding the foregoing, payments in respect of the Notes denominated in
U.S. dollars will only be made at the specified office of a Paying Agent in
the United States (which expression, as used herein, means the United States
of America (including the States and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction) if:
(i) TMCC has appointed Paying Agents with specified offices outside
the United States with the reasonable expectation that such Paying Agents
would be able to make payment at such specified offices outside the United
States of the full amount owing in respect of the Notes in the manner provided
above when due;
(ii) payment of the full amount owing in respect of the Notes at such
specified offices outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions; and
(iii) such payment is then permitted under United States law without
involving, in the opinion of TMCC, adverse tax consequences to TMCC.
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(c) PAYMENT IN A COMPONENT CURRENCY
If any payment of principal or interest in respect of a Note is to be made in
ECU and, on the relevant due date, the ECU is neither used as the unit of
account of the EC nor as the currency of the European Union, the Agent shall,
without liability on its part and without having regard to the interests of
individual Noteholders, Receiptholders or Couponholders and after consultation
with TMCC if practicable, choose a currency which was a component of the ECU
when the ECU was most recently used as the unit of account of the EC (the
"Chosen Currency") in which all payments due on that due date with respect to
such Notes, Receipts and Coupons shall be made. Notice of the Chosen Currency
selected by the Agent shall, where practicable, be published in accordance
with Condition 16. The amount of each payment in such Chosen Currency shall be
computed on the basis of the equivalent of the ECU in that currency,
determined as set out in this paragraph (c), as of the fourth London Business
Day (as defined in Condition 4(b)(vii)) prior to the date on which such
payment is due.
Without prejudice to the preceding paragraph, on the first London Business Day
from which the ECU ceases to be used as the unit of account of the EC or as
the currency of the European Union, the Agent shall, without liability on its
part and without having regard to the interests of individual Noteholders,
Receiptholders or Couponholders and after consultation with TMCC if
practicable, choose a currency which was a component of the ECU when the ECU
was most recently used as the unit of account of the EC (also, the "Chosen
Currency") in which all payments with respect to Notes, Receipts and Coupons
having a due date prior thereto but not yet presented for payment are to be
made. The amount of each payment in such Chosen Currency shall be computed on
the basis of the equivalent of the ECU in that currency, determined as set out
in this paragraph (c), as of such first London Business Day.
The equivalent of the ECU in the relevant Chosen Currency as of any date (the
"Day of Valuation") shall be determined on the following basis by the Agent.
The component currencies of the ECU for this purpose (the "Components") shall
be the currency amounts which were components of the ECU as of the last date
on which the ECU was used as a unit of account of the EC.
The equivalent of the ECU in the Chosen Currency shall be calculated by,
first, aggregating the U.S. dollar equivalents of the Components, and then,
using the rate used for determining the U.S. dollar equivalents of the
Components in the Chosen Currency as set forth below, calculating the
equivalent in the Chosen Currency of such aggregate amount in U.S. dollars.
The U.S. dollar equivalent of each of the Components shall be determined by
the Agent on the basis of the middle spot delivery quotations prevailing at
11:00 a.m. (London time) on the Day of Valuation, as obtained by the Agent
from one or more leading banks as selected by the Agent in the country of
issue of the Component in question.
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If the official unit of any Component is altered by way of combination or
subdivision, the number of units of that Component shall be divided or
multiplied in the same proportion. If two or more Components are consolidated
into a single currency, the amounts of those Components shall be replaced by
an amount in such single currency equal to the sum of the amounts of the
consolidated Components expressed in such single currency. If any Component is
divided into two or more currencies, the amount of that Component shall be
replaced by amounts of such two or more currencies each of which shall be
equal to the amount of the former Component divided by the number of
currencies into which that currency was divided.
If no direct quotations are available for a Component as of a Day of Valuation
from any of the banks selected by the Agent for this purpose because foreign
exchange markets are closed in the country of issue of that currency or for
any other reason, the most recent direct quotations for that currency
obtainable by the Agent shall be used in computing the equivalents of the ECU
on such Day of Valuation; provided, however, that such most recent quotations
may be used only if they were prevailing in the country of issue of such
Component not more than two London Business Days before such Day of Valuation.
If the most recent quotations obtained by the Agent are those which were so
prevailing more than two London Business Days before such Day of Valuation,
the Agent shall determine the U.S. dollar equivalent of such Component on the
basis of cross rates derived from the middle spot delivery quotations for such
Component and for the U.S. dollar prevailing at 11:00 a.m. (London time) on
such Day of Valuation, as obtained by the Agent from one or more leading
banks, as selected by the Agent, in a country other than the country of issue
of such Component. If such most recent quotations obtained by the Agent are
those which were so prevailing not more than two London Business Days before
such Day of Valuation, the Agent shall determine the U.S. dollar equivalent of
such Component on the basis of such cross rates if the Agent judges that the
equivalent so calculated is more representative than the U.S. dollar
equivalent calculated on the basis of such most recent direct quotations.
Unless otherwise determined by the Agent, if there is more than one market for
dealing in any Component by reason of foreign exchange regulations or for any
other reason, the market to be referred to in respect of such currency shall
be that upon which a non-resident issuer of securities denominated in such
currency would purchase such currency in order to make payments in respect of
such securities.
All choices and determinations made by the Agent for the purposes of this
paragraph (c) shall be at its sole discretion and without having regard to
individual Noteholders, Receiptholders or Couponholders (after consultation
with TMCC if practicable) and shall, in the absence of manifest error, be
conclusive for all purposes and binding on TMCC and all Noteholders,
Receiptholders and Couponholders.
Whenever a payment is to be made in a Chosen Currency as provided in this
paragraph (c), such Chosen Currency shall be deemed to be the Specified
Currency for the purposes of the other provisions of this Condition 6.
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Notwithstanding the foregoing, from the start of the third stage of the
European Monetary Union, all payments in respect of Notes denominated or
payable in ECU will be payable in Euro at the exchange rate then established
in accordance with the Treaty establishing the European Communities as amended
by the Treaty on European Union. This Condition 6(c) will not result in a
payment in a Chosen Currency in such circumstances.
(d) PAYMENT BUSINESS DAY
Unless specified otherwise in the applicable Pricing Supplement, if the date
for payment of any amount in respect of any Note, Receipt or Coupon is not a
Payment Business Day in a place of presentation, the holder thereof shall not
be entitled to payment until the next following Payment Business Day in the
relevant place and shall not be entitled to further interest or other payment
in respect of such delay. For these purposes, unless otherwise specified in
the applicable Pricing Supplement, "Payment Business Day" means any day which
is (i) a day (other than a Saturday or Sunday) on which commercial banks are
open for business and foreign exchange markets settle payments in the relevant
place of presentation; (ii) a Business Day as defined in Condition 4; and
(iii) in relation to Notes denominated or payable in ECU, a day on which
payments in ECU can be settled by commercial banks and in foreign exchange
markets in the place in which the relevant account for payment is located.
(e) INTERPRETATION OF PRINCIPAL AND INTEREST
Any reference in these Terms and Conditions to principal in respect of the
Notes shall be deemed to include, as applicable:
(i) any Additional Amounts which may be payable under Condition 9 in
respect of principal;
(ii) the Final Redemption Amount of the Notes;
(iii) the Early Redemption Amount of the Notes;
(iv) in relation to Notes redeemable in installments, the Installment
Amounts;
(v) any premium and any other amounts which may be payable under or
in respect of the Notes;
(vi) in relation to Zero Coupon Notes, the Amortized Face Amount; and
(vii) the Optional Redemption Amount(s) (if any) of the Notes.
Any reference in these Terms and Conditions to interest in respect of the
Notes shall be deemed to include, as applicable, any Additional Amounts which
may be payable under Condition 9, except as provided in clause (i) above.
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7. AGENT AND PAYING AGENTS
The names of the initial Agent and the other initial Paying Agents and their
initial specified offices are set out on the inside back cover page of the
Offering Circular. In acting under the Agency Agreement, the Agent and the
Paying Agents will act solely as agents of TMCC and do not assume any
obligations or relationships of agency or trust to or with the Noteholders,
Receiptholders or Couponholders, except that (without affecting the
obligations of TMCC to the Noteholders, Receiptholders and Couponholders to
repay Notes and pay interest thereon) funds received by the Agent for the
payment of the principal of or interest on the Notes shall be held in trust by
it for the Noteholders and/or Receiptholders and/or Couponholders until the
expiration of the relevant period of prescription under Condition 15. TMCC
agrees to perform and observe the obligations imposed upon it under the Agency
Agreement and to use its best efforts to cause the Agent and the Paying Agents
to perform and observe the obligations imposed upon them under the Agency
Agreement. The Agency Agreement contains provisions for the indemnification of
the Agent and the Paying Agents and for relief from responsibility in certain
circumstances, and entitles any of them to enter into business transactions
with TMCC without being liable to account to the Noteholders, Receiptholders
or the Couponholders for any resulting profit.
TMCC is entitled to vary or terminate the appointment of any Paying Agent or
any other paying agent appointed under the terms of the Agency Agreement
and/or appoint additional or other paying agents and/or approve any change in
the specified office through which any paying agent acts, provided that:
(i) so long as the Notes of this Series are listed on any stock exchange,
there will at all times be a Paying Agent with a specified office in each
location required by the rules and regulations of the relevant stock exchange;
(ii) there will at all times be a Paying Agent with a specified office in
a city approved by the Agent in continental Europe; and
(iii) there will at all times be an Agent.
In addition, with respect to Notes denominated in U.S. dollars, TMCC shall
forthwith appoint a Paying Agent having a specified office in New York City in
the circumstances described in the final paragraph of Condition 6(b). Any
variation, termination, appointment or change shall only take effect (other
than in the case of insolvency, when it shall be of immediate effect) after
not less than 30 nor more than 45 days prior notice thereof shall have been
given to the Agent and the Noteholders in accordance with Condition 16.
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8. EXCHANGE OF TALONS
On and after the Fixed Interest Date or the Interest Payment Date, as
appropriate, on which the final Coupon comprised in any Coupon sheet matures,
the Talon (if any) forming part of such Coupon sheet may be surrendered at the
specified office of the Agent or any other Paying Agent in exchange for a
further Coupon sheet including (if such further Coupon sheet does not include
Coupons to, and including, the final date for the payment of interest due in
respect of the Note to which it appertains) a further Talon, subject to the
provisions of Condition 15. Each Talon shall, for the purposes of these Terms
and Conditions, be deemed to mature on the Fixed Interest Date or the Interest
Payment Date (as the case may be) on which the final Coupon comprised in the
relative Coupon sheet matures.
9. PAYMENT OF ADDITIONAL AMOUNTS
TMCC will, subject to certain limitations and exceptions (set forth below),
pay to a Noteholder, Receiptholder or Couponholder who is a United States
Alien (as defined below) such amounts ("Additional Amounts") as may be
necessary so that every net payment of principal or interest in respect of the
Notes, Receipts or Coupons after deduction or withholding for or on account of
any present or future tax, assessment or other governmental charge imposed
upon such Noteholder, Receiptholder or Couponholder, or by reason of the
making of such payment, by the United States or any political subdivision or
taxing authority thereof or therein, will not be less than the amount provided
for in the Notes, Receipts or Coupons. However, TMCC shall not be required to
make any payment of Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge which would not have
been imposed but for (i) the existence of any present or former connection
between such Noteholder, Receiptholder or Couponholder (or between a
fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a
power over, such Noteholder, Receiptholder or Couponholder, if such
Noteholder, Receiptholder or Couponholder is an estate, trust, partnership or
corporation) and the United States, including, without limitation, such
Noteholder, Receiptholder or Couponholder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) being or having been a citizen
or resident thereof or being or having been present or engaged in trade or
business therein or having or having had a permanent establishment therein,
or (ii) such Noteholder's, Receiptholder's or Couponholder's past or present
status as a personal holding company, foreign personal holding company or
controlled foreign corporation or a private foundation (as those terms are
defined for United States tax purposes) or as a corporation which accumulates
earnings to avoid United States federal income tax;
(b) any estate, inheritance, gift, sales, transfer, personal property or
similar tax, assessment or other governmental charge;
(c) any tax, assessment or other governmental charge that would not have
been so imposed but for the presentation of a Note, Receipt or Coupon for
payment on a date more than 15 days after the date on which such payment
became due and payable or the date on which payment thereof is duly provided
for, whichever occurs later;
(d) any tax, assessment or other governmental charge which is payable
otherwise than by withholding from payments of principal or interest in
respect of the Notes, Receipts or Coupons;
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(e) any tax, assessment or other governmental charge imposed on interest
received by (i) a 10 percent shareholder of TMCC within the meaning of
Internal Revenue Code Section 871(h)(3)(b) or Section 881(c)(3)(b) or (ii) a
bank extending credit pursuant to a loan agreement entered into in the
ordinary course of its trade or business;
(f) any tax, assessment or other governmental charge required to be
withheld by any Paying Agent from any payment of principal or interest in
respect of any Note, Receipt or Coupon, if such payment can be made without
such withholding by any other Paying Agent with respect to the Notes in a
Western European city;
(g) any tax, assessment or other governmental charge which would not have
been imposed but for the failure to comply with certification, information of
other reporting requirements concerning the nationality, residence, identity
or connection with the United States of the Noteholder, Receiptholder or
Couponholder or of the beneficial owner of such Note, Receipt or Coupon, if
such compliance is required by statute or by regulation of the United States
Treasury Department as a precondition to relief or exemption from such tax,
assessment or other governmental charge; or
(h) any combination of items (a), (b), (c), (d), (e), (f) and (g);
nor shall Additional Amounts be paid to any Noteholder, Receiptholder or
Couponholder who is a fiduciary or partnership or other than the sole
beneficial owner of the Note, Receipt or Coupon to the extent a beneficiary or
settlor with respect to such fiduciary or a member of such partnership or a
beneficial owner of the Note, Receipt or Coupon would not have been entitled
to payment of the Additional Amounts had such beneficiary, settlor, member or
beneficial owner been the holder of the Note, Receipt or Coupon.
The term "United States Alien" means any corporation, individual, fiduciary or
partnership that for United States federal income tax purposes is a foreign
corporation, nonresident alien individual, nonresident alien fiduciary of a
foreign estate or trust, or foreign partnership one or more members of which
is a foreign corporation, nonresident alien individual or nonresident alien
fiduciary of a foreign estate or trust.
If TMCC shall determine that any payment made outside the United States by
TMCC or any of its Paying Agents of the full amount of the next scheduled
payment of either principal or interest due in respect of any Note, Receipt or
Coupon of this Series would, under any present or future laws or regulations
of the United States affecting taxation or otherwise, be subject to any
certification, information or other reporting requirements of any kind, the
effect of which requirements is the disclosure to TMCC, any of its Paying
Agents or any governmental authority of the nationality, residence or identity
(as distinguished from status as a United States Alien) of a beneficial owner
of such Note, Receipt or Coupon who is a United States Alien (other than such
requirements which (i) would not be applicable to a payment made to a
custodian, nominee or other agent of the beneficial owner, or which can be
satisfied by such a custodian, nominee or other agent certifying to the effect
that such beneficial owner is a United States Alien; provided, however, in
each case that payment by such custodian, nominee or agent to such beneficial
owner is not otherwise subject to any requirements referred to in this
sentence, (ii) are applicable only to payment by a custodian, nominee or other
A-23
<PAGE>
agent of the beneficial owner to or on behalf of such beneficial owner, or
(iii) would not be applicable to a payment made by any other paying agent of
TMCC), TMCC shall redeem the Notes of this Series as a whole but not in part
at a redemption price equal to the Early Redemption Amount together, if
appropriate, with accrued interest to, but excluding, the date fixed for
redemption, such redemption to take place on such date not later than one year
after the publication of notice of such determination. If TMCC becomes aware
of an event that might give rise to such certification, information or other
reporting requirements, TMCC shall, as soon as practicable, solicit advice of
independent counsel selected by TMCC to establish whether such certification,
information or other reporting requirements will apply and, if such
requirements will apply, TMCC shall give prompt notice of such determination
(a "Tax Notice") in accordance with Condition 16 stating in such notice the
effective date of such certification, information or other reporting
requirements and, if applicable, the date by which the redemption shall take
place. Notwithstanding the foregoing, TMCC shall not redeem Notes if TMCC
shall subsequently determine not less than 30 days prior to the date fixed for
redemption that subsequent payments would not be subject to any such
requirements, in which case TMCC shall give prompt notice of such
determination in accordance with Condition 16 and any earlier redemption
notice shall thereby be revoked and of no further effect.
Notwithstanding the foregoing, if and so long as the certification,
information or other reporting requirements referred to in the preceding
paragraph would be fully satisfied by payment of a backup withholding tax or
similar charge, TMCC may elect prior to publication of the Tax Notice to have
the provisions described in this paragraph apply in lieu of the provisions
described in the preceding paragraph, in which case the Tax Notice shall state
the effective date of such certification, information or reporting
requirements and that TMCC has elected to pay Additional Amounts rather than
redeem the Notes. In such event, TMCC will pay as Additional Amounts such
amounts as may be necessary so that every net payment made following the
effective date of such certification, information or reporting requirements
outside the United States by TMCC or any of its Paying Agents of principal or
interest due in respect of a Note, Receipt or Coupon to a holder who certifies
to the effect that the beneficial owner of such Note, Receipt or Coupon is a
United States Alien (provided that such certification shall not have the
effect of communicating to TMCC or any of its Paying Agents or any
governmental authority the nationality, residence or identity of such
beneficial owner) after deduction or withholding for or on account of such
backup withholding tax or similar charge (other than a backup withholding tax
or similar charge which (i) is imposed as a result of certification,
information or other reporting requirements referred to in the second
parenthetical clause of the first sentence of the preceding paragraph, or (ii)
is imposed as a result of the fact that TMCC or any of its Paying Agents has
actual knowledge that the holder or beneficial owner of such Note, Receipt or
Coupon is not a United States Alien but is within the category of persons,
corporations or other entities described in clause (a)(i) of the third
preceding paragraph, or (iii) is imposed as a result of presentation of such
Note, Receipt or Coupon for payment more than 15 days after the date on which
such payment becomes due and payable or on which payment thereof is duly
provided for, whichever occurs later), will not be less than the amount
provided for in such Note, such Receipt or such Coupon to be then due and
payable. In the event TMCC elects to pay such Additional Amounts, TMCC will
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<PAGE>
have the right, at its sole option, at any time, to redeem the Notes of this
Series, as a whole but not in part at a redemption price equal to their Early
Redemption Amount, together, if appropriate, with accrued interest to the date
fixed for redemption including any Additional Amounts required to be paid
under this paragraph. If TMCC has made the determination described in the
preceding paragraph with respect to certification, information or other
reporting requirements applicable to interest only and subsequently makes a
determination in the manner and of the nature referred to in such preceding
paragraph with respect to such requirements applicable to principal, TMCC will
redeem the Notes of this Series in the manner and on the terms described in
the preceding paragraph (except as provided below), unless TMCC elects to have
the provisions of this paragraph apply rather than the provisions of the
immediately preceding paragraph. If in such circumstances the Notes are to be
redeemed, TMCC will be obligated to pay Additional Amounts with respect to
interest, if any, accrued to the date of redemption. If TMCC has made the
determination described in the preceding paragraph and subsequently makes a
determination in the manner and of the nature referred to in such preceding
paragraph that the level of withholding applicable to principal or interest
has been increased, TMCC will redeem the Notes of this Series in the manner
and on the terms described in the preceding paragraph (except as provided
below), unless TMCC elects to have the provisions of this paragraph apply
rather than the provisions of the immediately preceding paragraph. If in such
circumstances the Notes are to be redeemed, TMCC will be obligated to pay
Additional Amounts with respect to the original level of withholding on
principal and interest, if any, accrued to the date of redemption.
10. NEGATIVE PLEDGE
The Notes will not be secured by any mortgage, pledge or other lien. TMCC
shall not pledge or otherwise subject to any lien any property or assets of
TMCC unless the Notes 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 will 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 will 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;
A-25
<PAGE>
(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 provisions of any statute;
(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 l 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.
11. CONSOLIDATION OR MERGER
TMCC may consolidate with, or sell, lease or convey all or substantially all
of its assets as an entirety 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 of America or any state thereof
and such successor corporation shall expressly assume the due and punctual
payment of the principal of and interest (including Additional Amounts as
provided in Condition 9) on all the Notes, Receipts and Coupons, according to
their tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Note to be performed by TMCC by an amendment
to the Agency Agreement executed by such successor corporation, TMCC and the
Agent, and (ii) immediately after giving effect to such transaction, no Event
of Default under Condition 13, and no event which, with notice or lapse of
time or both, would become such an Event of Default
A-26
<PAGE>
shall have happened and be continuing. In case of any such consolidation,
merger, sale, lease or conveyance and upon any such assumption by the
successor corporation, such successor corporation shall succeed to and be
substituted for TMCC, with the same effect as if it had been named herein as
TMCC, and the predecessor corporation, except in the event of a conveyance by
way of lease, shall be relieved of any further obligation under this Note and
the Agency Agreement.
12. MEETINGS, MODIFICATIONS AND WAIVERS
The Agency Agreement contains provisions, which, unless otherwise provided in
the Pricing Supplement, are binding on TMCC, the Noteholders, the
Receiptholders and the Couponholders, for convening meetings of holders of
Notes, Receipts and Coupons to consider matters affecting their interests,
including the modification or waiver of the Terms and Conditions applicable to
the Notes.
The Agency Agreement, the Notes and any Receipts and Coupons attached to the
Notes may be amended by TMCC (and, in the case of the Agency Agreement, the
Agent) (i) for the purpose of curing any ambiguity, or for curing, correcting
or supplementing any defective provision contained therein, or to evidence the
succession of another corporation to TMCC as provided in Condition 11, (ii) to
make any further modifications of the terms of the Agency Agreement necessary
or desirable to allow for the issuance of any additional Notes (which
modifications shall not be materially adverse to holders of outstanding Notes)
or (iii) in any manner which TMCC (and, in the case of the Agency Agreement,
the Agent) may deem necessary or desirable and which shall not materially
adversely affect the interests of the holders of the Notes, Receipts and
Coupons, to all of which each holder of Notes, Receipts and Coupons shall, by
acceptance thereof, consent. In addition, with the written consent of the
holders of not less than a majority in aggregate principal amount of the Notes
then outstanding affected thereby, or by a resolution adopted by a majority in
aggregate principal amount of such outstanding Notes affected thereby present
or represented at a meeting of such holders at which a quorum is present, as
provided in the Agency Agreement (provided that such resolution shall be
approved by the holders of not less than 25 percent of the aggregate principal
amount of Notes affected thereby then outstanding), TMCC and the Agent may
from time to time and at any time enter into agreements modifying or amending
the Agency Agreement or the terms and conditions of the Notes, Receipts and
Coupons for the purpose of adding any provisions to or changing in any manner
or eliminating any provisions of the Agency Agreement or of modifying in any
manner the rights of the holders of Notes, Receipts and Coupons; provided,
however, that no such agreement shall, without the consent or the affirmative
vote of the holder of each Note affected thereby, (i) change the stated
maturity of the principal of or any installment of interest on any Note, (ii)
reduce the principal amount of or interest on any Note, (iii) change the
obligation of TMCC to pay Additional Amounts as provided in Condition 9, (iv)
reduce the percentage in principal amount of outstanding Notes the consent of
the holders of which is necessary to modify or amend the Agency Agreement or
the terms and conditions of the Notes or to waive any future compliance or
past default, or (v) reduce the percentage in principal amount of outstanding
Notes the consent of the holders of which is required at any meeting of
holders of Notes at which a resolution is adopted. The quorum at any meeting
called to adopt a resolution will be persons holding or representing a
majority in aggregate principal amount of the Notes at the time outstanding
affected thereby and at any adjourned meeting will be one or more persons
holding or representing 25 percent in aggregate principal amount of such
A-27
<PAGE>
Notes at the time outstanding affected thereby. Any instrument given by or on
behalf of any holder of a Note in connection with any consent to any such
modification, amendment or waiver will be irrevocable once given and will be
conclusive and binding on all subsequent holders of such Note. Any
modifications, amendments or waivers to the Agency Agreement or to the terms
and conditions of the Notes, Receipts and Coupons will be conclusive and
binding on all holders of Notes, Receipts and Coupons, whether or not they
have given such consent or were present at any meeting, and whether or not
notation of such modifications, amendments or waivers is made upon the Notes,
Receipts and Coupons. It shall not be necessary for the consent of the holders
of Notes under this Condition 12 to approve the particular form of any
proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof.
Notes authenticated and delivered after the execution of any amendment to the
Agency Agreement, Notes, Receipts or Coupons may bear a notation in form
approved by the Agent as to any matter provided for in such amendment to the
Agency Agreement.
New Notes so modified as to conform, in the opinion of the Agent and TMCC, to
any modification contained in any such amendment may be prepared by TMCC,
authenticated by the Agent and delivered in exchange for the Notes then
outstanding.
For the purposes of this Condition 12 and Condition 13 below, the term
"outstanding" means, in relation to the Notes, all Notes issued under the
Agency Agreement other than (i) those which have been redeemed in full in
accordance with the Agency Agreement or these Terms and Conditions, (ii) those
in respect of which the date for redemption in accordance with these Terms and
Conditions has occurred and the redemption moneys therefor (including all
interest (if any) accrued thereon to the date for such redemption and any
interest (if any) payable under these Terms and Conditions after such date)
have been duly paid to the Agent as provided in the Agency Agreement (and,
where appropriate, notice has been given to the Noteholders in accordance with
Condition 16) and remain available for payment against presentation of the
Notes, (iii) those which have become void under Condition 15, (iv) those which
have been purchased and canceled as provided in Condition 5, (v) those
mutilated or defaced notes which have been surrendered in exchange for
replacement Notes pursuant to Condition 14, (vi) (for the purposes only of
determining how many Notes are outstanding and without prejudice to their
status for any other purpose) those Notes alleged to have been lost, stolen or
destroyed and in respect of which replacement Notes have been issued pursuant
to Condition 14 and (vii) temporary global Notes to the extent that they shall
have been duly exchanged in whole for permanent global Notes or definitive
Notes and permanent global Notes to the extent that they shall have been duly
exchanged in whole for definitive Notes, in each case pursuant to their
respective provisions.
13. DEFAULT AND ACCELERATION
(a) In the event that (each an "Event of Default"):
(i) default shall be made in the payment when due of any installment
of interest or any Additional Amounts on any of the Notes continued for a
period of 30 days after the date when due; or
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<PAGE>
(ii) default shall be made for more than three days in the payment
when due of the principal of any Note (whether at maturity or upon redemption
or otherwise); or
(iii) default in the deposit of any sinking fund payment with respect
to any Note when and as due; or
(iv) TMCC shall fail to perform or observe any other term, covenant
or agreement contained in the Terms and Conditions applicable to any of the
Notes or in the Agency Agreement for a period of 60 days after the date on
which written notice of such failure, requiring TMCC to remedy the same, first
shall have been given to the Agent and TMCC by the holders of at least 25
percent in aggregate principal amount of the Notes then outstanding; or
(v) there is an acceleration of, or failure to pay when due and
payable, any indebtedness for money borrowed of TMCC exceeding $10,000,000 and
such acceleration is not rescinded or annulled, or such indebtedness is not
discharged, within 10 days after written notice thereof has first been given
to TMCC and the Agent by the holders of not less than 10 percent in aggregate
principal amount of Notes then outstanding; or
(vi) the entry by a court having competent jurisdiction of (a) a
decree or order granting relief in respect of TMCC in an involuntary
proceeding under any applicable bankruptcy, insolvency, reorganization or
other similar law and such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or (b) a decree or order adjudging TMCC
to be insolvent, or approving a petition seeking reorganization, arrangement,
adjustment or composition of TMCC and such decree or order shall remain
unstayed and in effect for a period of 60 consecutive days; or (c) a final and
non-appealable order appointing a custodian, receiver, liquidator, assignee,
trustee or other similar official of TMCC or of any substantial part of the
property of TMCC, or ordering up the winding up or liquidation of the offices
of TMCC; or
(vii) the commencement by TMCC of a voluntary proceeding under any
applicable bankruptcy, insolvency, reorganization or other similar law or of a
voluntary proceeding seeking to be adjudicated insolvent or the consent of
TMCC to the entry of a decree or order for relief in an involuntary proceeding
under any applicable bankruptcy, insolvency, reorganization or other similar
law or to the commencement of any insolvency proceedings against it, or the
filing by TMCC of a petition or answer or consent seeking reorganization or
relief under any applicable law, or the consent by TMCC to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or similar official of TMCC or any
substantial part of the property of TMCC or the making by TMCC of an
assignment for the benefit of creditors, or the taking of corporate action by
TMCC in furtherance of any such action;
then the holder of any Note may, at its option, declare the principal of such
Note and the interest, if any, accrued thereon to be due and payable
immediately by written notice to TMCC and the Agent at its main office in
London, and unless all such defaults shall have been cured by TMCC prior to
receipt of such written notice, the principal of such Note and the interest,
if any, accrued thereon shall become and be immediately due and payable.
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<PAGE>
At any time after such a declaration of acceleration with respect to the Notes
has been made and before a judgment or decree for payment of the money due
with respect to any Note has been obtained by any Noteholder, such declaration
and its consequences may be rescinded and annulled upon the written consent of
holders of a majority in aggregate principal amount of the Notes then
outstanding, or by resolution adopted by a majority in aggregate principal
amount of the Notes present or represented at a meeting of holders of the
Notes at which a quorum is present, as provided in the Agency Agreement, if:
(1) TMCC has paid or deposited with the Agent a sum sufficient
to pay
(A) all overdue installments of interest on the Notes,
(B) the principal of Notes which has become due otherwise
than by such declaration of acceleration; and
(2) all Events of Default with respect to the Notes, other than
the non-payment of the principal of such Notes which has become due solely by
such declaration of acceleration, have been cured or waived as provided in
paragraph (b) below.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
(b) Any Events of Default by TMCC, other than the events described in
paragraph (a)(i) or (a)(ii) above or in respect of a covenant or provision
which cannot be modified and amended without the written consent of the
holders of all outstanding Notes, may be waived by the written consent of
holders of a majority in aggregate principal amount of the Notes then
outstanding affected thereby, or by resolution adopted by the holders of a
majority in aggregate principal amount of such Notes then outstanding present
or represented at a meeting of holders of the Notes affected thereby at which
a quorum is present, as provided in the Agency Agreement.
14. REPLACEMENT OF NOTES, RECEIPTS, COUPONS AND TALONS
Should any Note, Receipt, Coupon or Talon be mutilated, defaced or destroyed
or be lost or stolen, it may be replaced at the specified office of the Agent
in London (or such other place outside the United States as may be notified to
the Noteholders), in accordance with all applicable laws and regulations, upon
payment by the claimant of the expenses incurred by TMCC and the Agent in
connection therewith and on such terms as to evidence, indemnity, security or
otherwise as TMCC and the Agent may require. Mutilated or defaced Notes,
Receipts, Coupons or Talons must be surrendered before replacements will be
issued.
15. PRESCRIPTION
Unless provided otherwise in the applicable pricing supplement, the Notes,
Receipts and Coupons will become void unless presented for payment within a
period of five years from the Relevant Date (as defined below) relating
thereto. Any moneys paid by TMCC to the Agent for the payment of principal or
interest in respect of the Notes and remaining unclaimed for a period of one
year shall forthwith be repaid to TMCC and holders shall thereafter look only
to TMCC for payment thereof. All liability with respect thereto shall cease
when the Notes, Receipts and Coupons become void.
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<PAGE>
As used herein, the "Relevant Date" means:
(A) the date on which such payment first becomes due; or
(B) if the full amount of the moneys payable has not been received by the
Agent on or prior to such due date, the date on which, the full amount of such
moneys having been so received, notice to that effect shall have been given to
the Noteholders in accordance with Condition 16.
16. NOTICES
All notices regarding the Notes shall be published in one leading English
language daily newspaper with circulation in London (which is expected to be
the Financial Times in London) or, if this is not practicable, one other such
English language newspaper as TMCC, in consultation with the Agent, shall
decide. In addition, with respect to any Notes quoted on the Paris Bourse, and
so long as that exchange so requires, any notice to the holder of such Notes
or the Coupons relating thereto will be validly given if published in a daily
newspaper of general circulation in Paris (which is expected to be les Echos),
or if this is not practicable, in a newspaper of general circulation in France
as determined by TMCC, in consultation with the Agent. TMCC shall also ensure
that notices are duly published in a manner which complies with the rules and
regulations of any stock exchange on which the Notes are for the time being
listed. Any such notice shall be deemed to have been given on the date of the
first publication.
Except in the case of Paris Bourse listed Notes, until such time as any
definitive Notes are issued, there may, so long as the global Notes for this
Series are held in their entirety on behalf of Euroclear and Cedel Bank, be
substituted for such publication in such newspaper the delivery of the
relevant notice to Euroclear and Cedel Bank for communication by them to the
holders of the Notes of this Series. Any such notice shall be deemed to have
been given to the holders of the Notes of this Series on the seventh day after
the day on which the said notice was given to Euroclear and Cedel Bank, or on
such other day as is specified in the applicable Pricing Supplement.
Notices to be given by any holder of the Notes of this Series shall be in
writing and given by lodging the same, together with the relevant Note or
Notes, with the Agent. While any of the Notes of this Series are represented
by a global Note, such notice may be given by any holder of a Note of this
Series to the Agent via Euroclear and/or Cedel Bank, as the case may be, in
such manner as the Agent and Euroclear and/or Cedel Bank, as the case may be,
may approve for this purpose.
17. GOVERNING LAW
The Agency Agreement and the Notes, the Receipts and the Coupons are governed
by, and shall be construed in accordance with, the laws of the State of New
York, United States of America, applicable to agreements made and to be
performed wholly within such jurisdiction.
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APPENDIX B
----------
FORMS OF GLOBAL AND DEFINITIVE NOTES,
-------------------------------------
COUPONS, RECEIPTS AND TALONS
----------------------------
B-1
<PAGE>
APPENDIX B-1
------------
FORM OF TEMPORARY GLOBAL NOTE OF
--------------------------------
TOYOTA MOTOR CREDIT CORPORATION
-------------------------------
[THE ISSUER IS NOT AN INSTITUTION AUTHORIZED UNDER THE BANKING ACT 1987
(EXEMPT TRANSACTIONS) REGULATIONS 1997 (THE "BANKING ACT OF 1987") AND THIS IS
A [SHORTER TERM DEBT SECURITY/LONGER TERM DEBT SECURITY]1 ISSUED IN
ACCORDANCE WITH REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987.
REPAYMENT OF THE PRINCIPAL AND THE PAYMENT OF ANY INTEREST IN CONNECTION WITH
THIS [SHORTER TERM DEBT SECURITY/LONGER TERM DEBT SECURITY] HAVE NOT BEEN
GUARANTEED.]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated under the laws of the State of California, U.S.A.)
TEMPORARY GLOBAL NOTE
representing
[Specified Currency and Principal Amount of Series]
EURO MEDIUM-TERM NOTES DUE [Year of Maturity]
Series No. [ ]
Serial No. [ ]
The Notes represented by this Temporary Global Note are listed
on The London Stock Exchange Limited
(the "London Stock Exchange")
This Note is a Temporary Global Note in respect of a duly authorized issue of
[Specified Currency and Principal Amount of Series] Euro Medium-Term Notes Due
[Year of Maturity] (the "Notes") of [Specified Currency and Specified
Denomination] each of Toyota Motor Credit Corporation (the "Company").
References herein to the Conditions shall be to the Terms and Conditions of
the Notes (the "Conditions") as set out in Appendix A to the Agency Agreement
(as defined below) as modified and supplemented by the information set out in
the Pricing Supplement (the "Pricing Supplement") (which is attached hereto),
provided that, in the event of any conflict between the provisions of the
Conditions and the information set out in the Pricing Supplement, the latter
shall prevail. Words and expressions defined in the Conditions and the
Pricing Supplement and not otherwise defined herein shall have the same
meanings when used herein.
- ---------------------------
1- Use the term "Shorter Term Debt Security" in the case of Notes with a
maturity of one year to two years and 364 days and use the term "Longer Term
Debt Security" in the case of Notes with a maturity of three years or more.
2- Delete entire paragraph in the case of all Notes other than Notes
denominated in Sterling.
3- Delete in the case of all Notes other than Notes listed on the London Stock
Exchange, or add reference to any other Stock Exchange, if applicable
B-1-1
<PAGE>
This Temporary Global Note is issued subject to, and with the benefit of, the
Conditions and the Second Amended and Restated Agency Agreement (the "Agency
Agreement", which expression shall be construed as a reference to that
agreement as the same may be amended or supplemented from time to time) dated
July 24, 1997, between the Company and The Chase Manhattan Bank (the "Agent")
and the other agents named therein.
This Temporary Global Note is to be held by a common depositary for Morgan
Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System ("Euroclear"), Cedel Bank, societe anonyme ("Cedel Bank")
and/or such other relevant clearing agency as is specified in the related
Pricing Supplement on behalf of account holders which have the Notes
represented by this Temporary Global Note credited to their respective
securities accounts therewith from time to time.
For value received, the Company, subject to and in accordance with the
Conditions, promises to pay to the bearer hereof on [each Installment Date the
relevant Installment Amount] the [Maturity Date], or on such earlier date as
the Notes may become due and repayable in accordance with the Conditions, the
amount payable under the Conditions on redemption of the Notes then
represented by this Temporary Global Note and to pay interest (if any) on the
principal amount of the Notes from time to time represented by this Temporary
Global Note calculated and payable as provided in the Conditions together with
any other sums payable under the Conditions, upon presentation and, at
maturity, surrender of this Temporary Global Note at the principal office of
the Agent in London, England, or at the offices of any of the other paying
agents located outside the United States (as defined below) (except as
provided in the Conditions) from time to time appointed by the Company in
respect of the Notes, but in each case subject to the requirements as to
certification provided herein. Any monies paid by the Company to the Agent
for the payment of or interest on any Notes and remaining unclaimed at the end
of one year after such principal or interest shall have become due and payable
(whether at maturity, upon call for redemption or otherwise) shall then be
repaid to the Company and upon such repayment all liability of the Agent with
respect thereto shall thereupon cease, without, however, limiting in any way
any obligation the Company may have to pay the principal of or interest on
this Note as the same shall become due. On any payment of an installment or
interest being made, details of such payment shall be entered by or on behalf
of the Company in Schedule One hereto and the relevant space in Schedule One
hereto recording any such payment shall be signed by or on behalf of the
Company.
On any redemption or purchase and cancellation of any of the Notes represented
by this Temporary Global Note, details of such redemption or purchase and
cancellation shall be entered by or on behalf of the Company in Schedule Two
hereto and the relevant space in Schedule Two hereto recording any such
redemption or purchase and cancellation shall be signed by or on behalf of
the Company. Upon any such redemption or purchase and cancellation, the
principal amount of this Temporary Global Note and the Notes represented by
this Temporary Global Note shall be reduced by the principal amount so
redeemed or purchased and canceled.
B-1-2
<PAGE>
Prior to the Exchange Date (as defined below), all payments (if any) on this
Temporary Global Note will only be made to the bearer hereof to the extent
that there is presented to the Agent by Euroclear, Cedel Bank and/or such
other relevant clearing agency, a certificate, substantially in the form set
out in Schedule Three hereto, to the effect that it has received from or in
respect of a person entitled to a particular principal amount of the Notes (as
shown by its records) a certificate from such person in or substantially in
the form of Certificate "A" as set out in Schedule Three hereto. After the
Exchange Date the holder of this Temporary Global Note will not be entitled to
receive any payment of interest hereon.
On or after the date which is 40 days after the Issue Date (the "Exchange
Date"), this Temporary Global Note may, under the circumstances set forth in
the Conditions and the Pricing Supplement, be exchanged, in whole or in part
for either Definitive Notes and (if applicable) Receipts, Coupons and Talons
in or substantially in the forms set out in Appendices B-3, B-4, B-5 and B-6,
respectively, to the Agency Agreement (on the basis that all appropriate
details have been included on the face of such Definitive Notes and (if
applicable) Receipts, Coupons and Talons and the Pricing Supplement (or the
relevant provisions of the Pricing Supplement) have either been endorsed on or
attached to such Definitive Notes) and/or, a Permanent Global Note in the form
set out in Appendix B-2 to the Agency Agreement (together with the Pricing
Supplement attached thereto) upon presentation of this Temporary Global Note
by the bearer hereof at the offices of the Agent in London, England (or at
such other place outside the United States of America, its territories and
possessions, any State of the United States and the District of Columbia (the
"United States") as the Agent may agree). As specified in the Pricing
Supplement, the exchange of this Temporary Global Note for Definitive Notes
may also require written notice being given to the Agent by Euroclear, Cedel
Bank or other relevant clearing agency on behalf of holders of Notes and/or
the payment of certain costs each of which shall be specified in the Pricing
Supplement. Definitive Notes or the Permanent Global Note shall be so issued
and delivered in exchange for only that portion of this Temporary Global Note
in respect of which there shall have been presented to the Agent by Euroclear,
Cedel Bank and/or such other relevant clearing agency, a certificate,
substantially in the form set out in Schedule Three hereto, to the effect that
it has received from or in respect of a person entitled to a particular
principal amount of the Notes (as shown by its records) a certificate from
such person in or substantially in the form of Certificate "A" as set out in
Schedule Three hereto and, in the case of Definitive Notes, subject to such
notice period and payment of costs as may be specified in the Pricing
Supplement. If Definitive Notes and (if applicable) Receipts, Coupons and
Talons have already been issued in exchange for all the Notes represented for
the time being by the Permanent Global Note, then this Temporary Global Note
may only thereafter be exchanged for Definitive Notes and (if applicable)
Receipts, Coupons and Talons pursuant to the terms hereof.
B-1-3
<PAGE>
On an exchange of the whole of this Temporary Global Note, this Temporary
Global Note shall be surrendered to the Agent. On an exchange of part only of
this Temporary Global Note, details of such exchange shall be entered by or on
behalf of the Company in Schedule Two hereto and the relevant space in
Schedule Two hereto recording such exchange shall be signed by or on behalf of
the Company. If, following the issue of a Permanent Global Note in exchange
for some of the Notes represented by this Temporary Global Note, further Notes
represented by this Temporary Global Note are to be exchanged pursuant to this
paragraph, such exchange may be effected, without the issue of a new Permanent
Global Note, by the Company or its agent endorsing Schedule Two of the
Permanent Global Note previously issued to reflect an increase in the
aggregate principal amount of the Permanent Global Note which would otherwise
have been issued on such exchange.
Until the exchange of the whole of this Temporary Global Note as aforesaid,
the bearer hereof shall in all respects (except as otherwise provided herein)
be entitled to the same benefits as if it were the bearer of Definitive Notes,
Coupons and Receipts in the form set out in Appendices B-3, B-4, and B-5 to
the Agency Agreement.
[The Company has complied with its obligations under the relevant rules (as
defined in the Banking Act 1987 (Exempt Transactions) Regulations 1997 (the
"Regulations") and under rules made under Section 142(6) of the Financial
Services Act 1986 in respect of its debt securities listed on the London Stock
Exchange. Since information was last provided in compliance with those
obligations, the Company, having made all reasonable enquiries, has not become
aware of any change in circumstances which could reasonably be regarded as
significantly and adversely affecting its ability to meet its obligations in
respect hereof as they fall due.] 4
This Temporary Global Note is governed by, and shall be construed in
accordance with, the laws of the State of New York, United States of America,
applicable to agreements made and to be performed wholly within such
jurisdiction.
This Temporary Global Note shall not be valid unless authenticated by the
Agent. This Temporary Global Note may be duly executed on behalf of the
Company by manual or facsimile signature.
- ----------------------------
4- Delete in the case of all Notes other than Notes denominated in Sterling.
B-1-4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Temporary Global Note to be
duly executed on its behalf.
Dated: TOYOTA MOTOR CREDIT CORPORATION
By: --------------------------------
George Borst
Senior Vice President
and General Manager
FISCAL AGENT'S CERTIFICATE OF ATTEST:
AUTHENTICATION
This is one of the Temporary --------------------------------
Global Notes described in the Robert Pitts
within mentioned Agency Agreement Secretary
By or on behalf of
THE CHASE MANHATTAN BANK
as Fiscal Agent
By: -----------------------------
(Authorized Signatory)
B-1-5
<PAGE>
SCHEDULE ONE
PART I
INTEREST PAYMENTS
<TABLE>
<CAPTION>
Confirmation of
Total Amount Amount of payment by or
Interest Date of of Installments Installments on behalf of
Payment Date Payment Payable Paid the Company
<C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
First ----------- ------------ -------------- ------------
Second ----------- ------------ -------------- ------------
</TABLE>
B-1-6
<PAGE>
PART II
INSTALLMENT PAYMENTS
<TABLE>
<CAPTION>
Confirmation of
Total Amount Amount of payment by or
Interest Date of of Installments Installments on behalf of
Payment Date Payment Payable Paid the Company
<C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
First ----------- ------------ -------------- ------------
Second ----------- ------------ -------------- ------------
</TABLE>
B-1-7
<PAGE>
SCHEDULE TWO
SCHEDULE OF EXCHANGES
FOR NOTES REPRESENTED BY A PERMANENT GLOBAL NOTE OR
DEFINITIVE NOTES, OR REDEMPTIONS OR PURCHASES AND CANCELLATIONS
The following exchanges of a part of this Temporary Global Note for Notes
represented by a Permanent Global Note or Definitive Notes or redemptions or
purchases and cancellation of this Temporary Global Note have been made:
<TABLE>
<CAPTION>
Remaining
principal
Part of principal amount amount of Remaining amount
of this Temporary this Temporrary payable under this
Date of Global Notes exchanged Global Note Temporary Global
exchange, or for Notes represented following such Note following Notation made
redemption by a Permanent Global exchange, or such exchange, or by or on behalf
or purchase Note or Definitive redemption or or redemption or of the Company
and Notes or redeemed or purchase and purchase and
cancellation purchase and cancelled cancellation cancellation
- --------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
- ---------- ---------- ---------- ---------- ----------
- ---------- ---------- ---------- ---------- ----------
- ---------- ---------- ---------- ---------- ----------
- ---------- ---------- ---------- ---------- ----------
</TABLE>
B-1-8
<PAGE>
SCHEDULE THREE
FORM OF CERTIFICATE TO BE PRESENTED BY
APPROPRIATE CLEARING SYSTEM
---------------------------
TOYOTA MOTOR CREDIT CORPORATION
--------------------------
(the "Securities")
This is to certify that, based solely on certifications we have received in
writing, by telex or by electronic transmission from member organizations
appearing in our records as persons being entitled to a portion of the
principal amount set forth below (our "Member Organizations") substantially to
the effect set forth in the Agency Agreement, as of the date hereof, [ ]
principal amount of above-captioned Securities (i) is owned by persons that
are not citizens or residents of the United States, partnerships, corporations
or other entities created or organized under the laws of the United States or
any estate or trust the income of which is subject to United States federal
income taxation regardless of its source ("United States persons"), (ii) is
owned by United States persons that (a) are foreign branches of United States
financial institutions (as defined in U.S. Treasury Regulations Section 1.165-
12(c)(1)(v)) ("financial institutions") purchasing for their own account or
for resale, or (b) acquired the Securities through foreign branches of United
States financial institutions and who hold the securities through such United
States financial institutions on the date hereof (and in either case (a) or
(b), each such United States financial institution has agreed, on its own
behalf, or through its agent, that we may advise the Company or the Company's
agent that it will comply with the requirements of Section 165(j)(3)(A), (B)
or (C) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) is owned by the United States or foreign financial
institutions for purposes of resale during the restricted period (as defined
in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and to the
further effect that United States or foreign financial institutions described
in clause (iii) (whether or not also described in clause (i) or (ii)) have
certified that they have not acquired the Securities for purposes of resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.
As used herein, "United States" means the United States of America (including
the States and the District of Columbia); and its "possessions" include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
We further certify (i) that we are not making available herewith for exchange
(or, if relevant, exercise of any rights or collection of any interest) any
portion of the temporary global Security excepted in such Member Organization
certifications and (ii) that as of the date hereof we have not received any
notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any portion of
the part submitted herewith for exchange (or, if relevant, exercise of any
rights or collection of any interest) are no longer true and cannot be relied
upon at the date hereof.
B-1-9
<PAGE>
We will retain all certificates received from Member Organizations for the
period specified in U.S. Treasury Regulation Section 1.163-
5(c)(2)(i)(D)(3)(i)(C).
We understand that this certification is required in connection with certain
tax laws of the United States. In connection therewith, if administrative and
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification to any interested party in such proceedings.
Dated: ,199*
Yours Faithfully,
[APPROPRIATE CLEARING SYSTEM]
By: -------------------------
* This certificate is not to be dated earlier than five days prior to the
Exchange Date or relevant payment date, as applicable.
B-1-10
<PAGE>
CERTIFICATE "A"
FORM OF CERTIFICATE TO BE PRESENTED TO
APPROPRIATE CLEARING SYSTEM
---------------------------
TOYOTA MOTOR CREDIT CORPORATION
--------------------
(the "Securities")
This is to certify that as of the date hereof, and except as set forth below,
the above-captioned Securities held by you for our account (i) are owned by
person(s) that are not citizens or residents of the United States,
partnerships, corporations or other entities created or organized under the
laws of the United States or any estate or trust the income of which is
subject to United States federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that
(a) are foreign branches of United States financial institutions (as defined
in U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) ("financial
institutions") purchasing for their own account or for resale, or (b) acquired
the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such
United States financial institution hereby agrees, on its own behalf or
through its agent, that you may advise the Company or the Company's agent that
it will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) are owned by United States or foreign financial
institutions for purposes of resale during the restricted period (as defined
in U.S. Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and in addition
if the owner of the Securities is a United States or foreign financial
institution described in clause (iii) (whether or not also described in clause
(i) or (ii)) this is further to certify that such financial institution has
not acquired the Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its
possessions.
As used herein, "United States" mean the United States of America (including
the States and the District of Columbia); and its "possessions" include Puerto
Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
We undertake to advise you promptly by tested telex or facsimile on or prior
to the date on which you intend to submit your certification relating to the
Securities held by you for our account in accordance with your documented
procedures if any applicable statement herein is not correct on such date, and
in the absence of any such notification it may be assumed that this
certification applies as of such date.
B-1-11
<PAGE>
This certification excepts and does not relate to [ ] of such interest
in the above Securities in respect of which we are not able to certify and as
to which we understand exchange and delivery of definitive Securities and/or
an interest in a Permanent Global Note (or, if relevant, exercise of any right
or collection of any interest) cannot be made until we do so certify.
We understand that this certification is required in connection with certain
tax laws of the United States. In connection therewith, if administrative and
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification to any interested party in such proceedings.
Dated: ,199*
Yours faithfully,
[Name of Person Making Certification]
By: ---------------------------------
- ----------------
* This certificate is not to be dated earlier than fifteen days prior to
the Exchange Date or relevant payment date, as applicable.
B-1-12
<PAGE>
APPENDIX B-2
FORM OF PERMANENT GLOBAL NOTE OF
--------------------------------
TOYOTA MOTOR CREDIT CORPORATION
--------------------------------
[THE ISSUER IS NOT AN INSTITUTION AUTHORIZED UNDER THE BANKING ACT 1987
(EXEMPT TRANSACTIONS) REGULATIONS 1997 (THE "BANKING ACT OF 1987") AND THIS IS
A [SHORTER TERM DEBT SECURITY/LONGER TERM DEBT SECURITY]1 ISSUED IN
ACCORDANCE WITH REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987.
REPAYMENT OF THE PRINCIPAL AND THE PAYMENT OF ANY INTEREST IN CONNECTION WITH
THIS [SHORTER TERM DEBT SECURITY/LONGER TERM DEBT SECURITY] HAVE NOT BEEN
GUARANTEED.]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated under the laws of the State of California, U.S.A.)
PERMANENT GLOBAL NOTE
representing
[Specified Currency and Principal Amount of Series]
EURO MEDIUM-TERM NOTES DUE [Year of Maturity]
Series No. [ ]
Serial No. [ ]
The Notes represented by this Permanent Global Note are listed
on The London Stock Exchange Limited
(the "London Stock Exchange")
- ---------------------------------
1- Use the term "Shorter Term Debt Security" in the case of Notes with a
maturity of one year to two years and 364 days and use the term "Longer
Term Debt Security" in the case of Notes with a maturity of three years or
more.
2- Delete entire paragraph in the case of all Notes other than Notes
denominated in Sterling.
3- Delete in the case of all Notes other than Notes listed on the London
Stock Exchange, or add reference to other Stock Exchange, if applicable.
B-2-1
<PAGE>
This Note is a Permanent Global Note in respect of a duly authorized issue of
[Specified Currency and Principal Amount of Series] Euro Medium-Term Notes Due
[Year of Maturity] (the "Notes") of [Specified Currency and Specified
Denomination] each of Toyota Motor Credit Corporation (the "Company").
References herein to the Conditions shall be to the Terms and Conditions of
the Notes (the "Conditions") as set out in Appendix A to the Agency Agreement
(as defined below) as modified and supplemented by the information set out in
the Pricing Supplement (the "Pricing Supplement") (which is attached hereto)
and, in the event of any conflict between the provisions of the Conditions and
the information set out in the Pricing Supplement, the latter shall prevail.
Words and expressions defined in the Conditions and the Pricing Supplement and
not otherwise defined herein shall have the same meanings when used herein.
This Permanent Global Note is issued subject to, and with the benefit of, the
Conditions and the Second Amended and Restated Agency Agreement (the "Agency
Agreement", which expression shall be construed as a reference to that
agreement as the same may be amended or supplemented from time to time) dated
July 24, 1997, between the Company and The Chase Manhattan Bank (the "Agent")
and the other agents named therein.
This Permanent Global Note is to be held by a common depositary for Morgan
Guaranty Trust Company of New York, Brussels Office, as operator of the
Euroclear System ("Euroclear"), Cedel Bank, societe anonyme ("Cedel Bank")
and/or such other relevant clearing agency as is specified in the related
Pricing Supplement on behalf of account holders which have the Notes
represented by this Permanent Global Note credited to their respective
securities accounts therewith from time to time.
For value received, the Company, subject to and in accordance with the
Conditions, promises to pay to the bearer hereof on [each Installment Date the
relevant Installment Amount] the [Maturity Date], or on such earlier date as
the Notes may become due and repayable in accordance with the Conditions, the
amount payable under the Conditions on redemption of the Notes then
represented by this Permanent Global Note and to pay interest (if any) on the
principal amount of the Notes from time to time represented by this Permanent
Global Note calculated and payable as provided in the Conditions together with
any other sums payable under the Conditions, upon presentation and, at
maturity, surrender of this Permanent Global Note at the principal office of
the Agent in London, England, or at the offices of any of the other paying
agents located outside the United States (as defined below) (except as
provided in the Conditions) from time to time appointed by the Company in
respect of the Notes. Any monies paid by the Company to the Agent for the
payment of or interest on any Notes and remaining unclaimed at the end of one
year after such principal or interest shall have become due and payable
(whether at maturity, upon call for redemption or otherwise) shall then be
repaid to the Company and upon such repayment all liability of the Agent with
respect thereto shall thereupon cease, without, however, limiting in any way
any obligation the Company may have to pay the principal of or interest on
this Note as the same shall become due. On any payment of an installment or
interest being made details of such payment shall be entered by or on behalf
of the Company in Schedule One hereto and the relevant space in Schedule One
hereto recording any such payment shall be signed by or on behalf of the
Company.
B-2-2
<PAGE>
On any redemption or purchase and cancellation of any of the Notes represented
by this Permanent Global Note, details of such redemption or purchase and
cancellation shall be entered by or on behalf of the Company in Schedule Two
hereto and the relevant space in Schedule Two hereto recording any such
redemption or purchase and cancellation shall be signed by or on behalf of the
Company. Upon any such redemption or purchase and cancellation, the principal
amount of this Permanent Global Note and the Notes represented by this
Permanent Global Note shall be reduced by the principal amount so redeemed or
purchased and canceled.
The Notes represented by this Permanent Global Note were originally
represented by a Temporary Global Note. Unless such Temporary Global Note was
exchanged in whole on the issue hereof, such Temporary Global Note may be
further exchanged, on the terms and conditions set out therein, for this
Permanent Global Note. If any such exchange occurs following the issue
hereof, the Company or its agent shall endorse Schedule Two hereto to reflect
the increase in the aggregate principal amount of this Permanent Global Note
due to each such exchange, whereupon the principal amount hereof shall be
increased for all purposes by the amount so exchanged and endorsed.
This Permanent Global Note may (under the circumstances set forth in the
Conditions and the Pricing Supplement, be exchanged, in whole, but not in
part, for security-printed Definitive Notes and (if applicable) Receipts,
Coupons and Talons in or substantially in the forms set out in Appendices B-3,
B-4, B-5 and B-6, respectively, of the Agency Agreement (on the basis that all
appropriate details have been included on the face of such Definitive Notes
and (if applicable) Receipts, Coupons and Talons and the Pricing Supplement
(or the relevant provisions of the Pricing Supplement) have been either
endorsed on or attached to such Definitive Notes) in denominations of
[Specified Currency and Specified Denomination] each. As specified in the
Pricing Supplement, such exchange may also require written notice being given
to the Agent by Euroclear, Cedel Bank or such other relevant clearing agency
on behalf of holders of Notes and/or the payment of certain costs, each of
which shall be specified in the Pricing Supplement. Such exchange, if any,
will be made upon presentation of this Permanent Global Note by the bearer
hereof on any day (other than a Saturday or a Sunday) on which banks are open
for business in London at the principal office of the Agent in London,
England; provided, however, the first notice given to the Agent by Euroclear,
Cedel Bank and/or such other relevant clearing agency shall give rise to the
issue of Definitive Notes for the total amount of Notes represented by this
Global Note. The aggregate principal amount of Definitive Notes issued upon
an exchange of this Permanent Global Note will be equal to the aggregate
principal amount of this Permanent Global Note submitted by the bearer hereof
for exchange (to the extent that such principal amount does not exceed the
aggregate principal amount of this Permanent Global Note, as adjusted, as
shown in Schedule Two hereto). On an exchange of the whole of this Permanent
Global Note, this Permanent Global Note shall be surrendered to the Agent.
Until the exchange of the whole of this Permanent Global Note as aforesaid,
the bearer hereof shall in all respects be entitled to the same benefits as if
it were the bearer of Definitive Notes, Coupons, Receipts and Talons in the
form set out in Appendices B-3, B-4, B-5 and B-6, respectively, to the Agency
Agreement.
B-2-3
<PAGE>
[The Company has complied with its obligations under the relevant rules (as
defined in the Banking Act 1987 (Exempt Transactions) Regulations 1997 (the
"Regulations") and under rules made under Section 142(6) of the Financial
Services Act 1986 in respect of its debt securities listed on the London Stock
Exchange. Since information was last provided in compliance with those
obligations, the Company, having made all reasonable enquiries, has not become
aware of any change in circumstances which could reasonably be regarded as
significantly and adversely affecting its ability to meet its obligations in
respect hereof as they fall due.]
This Permanent Global Note is governed by, and shall be construed in
accordance with, the laws of the State of New York, United States of America,
applicable to agreements made and to be performed wholly within such
jurisdiction.
This Permanent Global Note shall not be valid unless authenticated by the
Agent. This Permanent Global Note may be duly executed on behalf of the
Company by manual or facsimile signature.
B-2-4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Permanent Global Note to be
duly executed on its behalf.
Dated: TOYOTA MOTOR CREDIT CORPORATION
By: ----------------------------------
George Borst
Senior Vice President
and General Manager
FISCAL AGENT'S CERTIFICATE OF ATTEST:
AUTHENTICATION
This is one of the Permanent -------------------------------------
Global Notes described in the Robert Pitts
within mentioned Agency Agreement Secretary
By or on behalf of
THE CHASE MANHATTAN BANK
as Fiscal Agent
By: -----------------------------
(Authorized Signatory)
B-2-5
<PAGE>
SCHEDULE ONE
PART I
INTEREST PAYMENTS
<TABLE>
<CAPTION>
Confirmation of
Total Amount payment by or
Interest Date of of Interest Amount of on behalf of
Payment Date Payment Payable Interest Paid the Company
- -----------------------------------------------------------------------------
<C> <C> <C> <C> <C>
First ---------- ---------- ---------- ----------
Second ---------- ---------- ---------- ----------
</TABLE>
B-2-6
<PAGE>
PART II
INSTALLMENT PAYMENTS
<TABLE>
<CAPTION>
Confirmation of
Total Amount Amount of payment by or
Interest Date of of Installments Installments on behalf of
Payment Date Payment Payable Paid the Company
- -----------------------------------------------------------------------------
<C> <C> <C> <C> <C>
First ---------- ---------- ---------- ----------
Second ---------- ---------- ---------- ----------
</TABLE>
B-2-7
<PAGE>
SCHEDULE TWO
SCHEDULE OF EXCHANGES OF A TEMPORARY
GLOBAL NOTE AND FOR DEFINITIVE NOTES
OR REDEMPTIONS OR PURCHASES AND CANCELLATIONS
The following increases of this Permanent Global Note, exchanges of this
Permanent Global Note for Definitive Notes or redemptions or purchases and
cancellations of this Permanent Global Note have been made:
<TABLE>
<CAPTION>
Remaining
principal
Part of principal amount amount of Remaining amount
of this Permanent this Permanent payable under this
Date of Increase in principal Global Note exchanged Global Note Permanent Global
exchange, or amount of this Permanent for Definitive Notes following such Note following Notation made
redemption Global Note due to or redeemed or exchange, or such exchange, by or on behalf
or purchase Exchanges of a Temporary purchase and cancelled redemption or or redemption or of the Company
and Global Note for this purchase and purchase and
cancellation Permanent Global Note cancellation cancellation
- ----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
- ---------- ---------- ----------- ---------- ---------- ----------
- ---------- ---------- ----------- ---------- ---------- ----------
- ---------- ---------- ----------- ---------- ---------- ----------
- ---------- ---------- ----------- ---------- ---------- ----------
</TABLE>
B-2-8
<PAGE>
APPENDIX B-3
DEFINITIVE NOTE OF
------------------
TOYOTA MOTOR CREDIT CORPORATION
-------------------------------
[THE ISSUER IS NOT AN INSTITUTION AUTHORIZED UNDER THE BANKING ACT 1987
(EXEMPT TRANSACTIONS) REGULATIONS 1997 (THE "BANKING ACT OF 1987") AND THIS IS
A [SHORTER TERM DEBT SECURITY/LONGER TERM DEBT SECURITY]1 ISSUED IN
ACCORDANCE WITH REGULATIONS MADE UNDER SECTION 4 OF THE BANKING ACT 1987.
REPAYMENT OF THE PRINCIPAL AND THE PAYMENT OF ANY INTEREST IN CONNECTION WITH
THIS [SHORTER TERM DEBT SECURITY/LONGER TERM DEBT SECURITY] HAVE NOT BEEN
GUARANTEED.]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated under the laws of the State of California, U.S.A.)
representing
[Specified Currency and Principal Amount of Series]
EURO MEDIUM-TERM NOTES DUE [Year of Maturity]
Series No. [ ]
Serial No. [ ]
The Notes represented by this Definitive Note are listed
on The London Stock Exchange Limited
(the "London Stock Exchange")
- ---------------------------------
1- Use the term "Shorter Term Debt Securities" in the case of Notes with a
maturity of one year to two years and 364 days and use the term "Longer
Term Debt Security" in the case of Notes with a maturity of three years or
more.
2- Delete entire paragraph in the case of all Notes other than Notes
denominated in Sterling.
3- Delete in the case of a series of Notes not listed on the London Stock
Exchange, or add reference to any other Stock Exchange, if applicable.
B-3-1
<PAGE>
This Note is one of a series of notes of [Specified Currency and Principal
Amount of Series] ("Notes") each of Toyota Motor Credit Corporation (the
"Company"). References herein to the Conditions shall be to the Terms and
Conditions of the Notes (the "Conditions") as set out in Appendix A to the
Agency Agreement (as defined below) as modified and supplemented by the
information set out in the Pricing Supplement (the "Pricing Supplement")
(which is reproduced on the reverse hereof) and, in the event of any conflict
between the provisions of the Conditions and the information set out in the
Pricing Supplement, the latter shall prevail. Words and expressions defined
in the Conditions and the Pricing Supplement and not otherwise defined herein
shall have the same meanings when used herein.
This Note is issued subject to, and with the benefit of, the Conditions and
the Second Amended and Restated Agency Agreement (the "Agency Agreement",
which expression shall be construed as a reference to that agreement as the
same may be amended or supplemented from time to time) dated July 24, 1997,
between the Company and The Chase Manhattan Bank (the "Agent") and the other
agents named therein.
For value received, the Company, subject to and in accordance with the
Conditions, promises to pay to the bearer hereof on [each Installment Date the
relevant Installment Amount] the [Maturity Date], or on such earlier date as
the Notes may become due and repayable in accordance with the Conditions, the
amount payable on redemption of this Note and to pay interest (if any) on the
principal amount of this Note calculated and payable as provided in the
Conditions.
Title to this Note and to any Coupon, Talon or Receipt appertaining hereto
shall pass by delivery. The Company may treat the bearer hereof as the
absolute owner of this Note for all purposes (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or writing hereof or
notice of any previous loss or theft thereof).
[The Company has complied with its obligations under the relevant rules (as
defined in the Banking Act 1987 (Exempt Transactions) Regulations 1997 (the
"Regulations") and under rules made under Section 142(6) of the Financial
Services Act 1986 in respect of its debt securities listed on the London Stock
Exchange Limited. Since information was last provided in compliance with
those obligations, the Company, having made all reasonable enquiries, has not
become aware of any change in circumstances which could reasonably be regarded
as significantly and adversely affecting its ability to meet its obligations
in respect hereof as they fall due.]
This Note is governed by, and shall be construed in accordance with, the laws
of the State of New York, United States of America, applicable to agreements
made and to be performed wholly within such jurisdiction.
This Note may be duly executed on behalf of the Company by manual or facsimile
signature.
- -------------------------
4- Delete in the case of all Notes other than Notes denominated in Sterling.
B-3-2
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed on
its behalf.
Dated: TOYOTA MOTOR CREDIT CORPORATION
By: -----------------------------------
George Borst
Senior Vice President
and General Manager
FISCAL AGENT'S CERTIFICATE OF ATTEST:
AUTHENTICATION
This is one of the Temporary --------------------------------------
Global Notes described in the Robert Pitts
within mentioned Agency Agreement Secretary
By or on behalf of
THE CHASE MANHATTAN BANK
as Fiscal Agent
By: -----------------------------
(Authorized Signatory)
[Reverse of Note - Terms and Conditions of the Notes]
B-3-3
<PAGE>
APPENDIX B-4
FORM OF COUPON
PART A
(Face of Coupon)
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated under the laws of the State of California, U.S.A.)
[Specified Currency and Principal Amount of Series]
EURO MEDIUM-TERM NOTES DUE [Year of Maturity]
Series No. [ ]
Serial No. [ ]
Part A
(Reverse of Coupon)
For Fixed Rate Notes:
Coupon No. F
This Coupon is payable to bearer, separately Coupon for
negotiable and subject to the Terms and [ ]
Conditions of the Note to which it appertains due on
[ ]
[19[ ]/20[]]
[SEAL]
ATTEST: TOYOTA MOTOR CREDIT
CORPORATION
By: By:
-------------------------------- --------------------------------
Authorized Officer Authorized Officer
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES TAX LAWS INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
B-4-1
<PAGE>
PART B
(Reverse of Coupon)
For Floating Rate, Dual Currency and Indexed Notes:
Coupon No. F
Coupon for the amount due in accordance with Coupon due
the Terms and Conditions of the said Notes. in [ ]
This Coupon is payable to bearer, separately [19[ ]/20[ ]]
negotiable and subject to such Terms and
Conditions of the Note to which it appertains,
under which it may become void before its due
date.
[SEAL]
ATTEST: TOYOTA MOTOR CREDIT
CORPORATION
By: ---------------------------- By: ----------------------------
Authorized Officer Authorized Officer
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES TAX LAWS INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
B-4-2
<PAGE>
(Reverse of Coupon)
ISSUING AND PRINCIPAL PAYING AGENT
The Chase Manhattan Bank
Trinity Tower
9 Thomas More Street
London E1 9YT
ENGLAND
PAYING AGENT
Chase Manhattan Bank Luxembourg S.A.
5 Rue Plaetis
L-2338
Luxembourg
and/or such other or further Agent and other or further Paying Agents and/or
specified offices as may from time to time be duly appointed by the Company
and notice of which has been given to the Noteholders.
B-4-3
<PAGE>
APPENDIX B-5
FORM OF RECEIPT
(On the front)
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated under the laws of the State of California, U.S.A.)
[Specified Currency and Principal Amount of Series]
EURO MEDIUM-TERM NOTES DUE [Year of Maturity]
Series No. [ ]
Serial No. [ ]
Receipt for the sum of [ ] being the installment of principal payable in
accordance with the Terms and Conditions endorsed on the Note to which this
Receipt appertains (the "Conditions") on [ ].
This Receipt is issued subject to and in accordance with the Conditions which
shall be binding upon the holder of this Receipt (whether or not it is for the
time being attached to such Note) and is payable at the specified office of
any of the Paying Agents set out on the reverse of the Note to which this
Receipt appertains (and/or any other or further Paying Agents and/or specified
offices as may from time to time be duly appointed and notified to the
Noteholders).
B-5-1
<PAGE>
This Receipt must be represented for payment together with the Note to which
it appertains. The Company shall have no obligation in respect of any Receipt
presented without the Note to which it appertains or any unmatured Receipts.
[SEAL]
ATTEST: TOYOTA MOTOR CREDIT
CORPORATION
By: ---------------------------- By: ----------------------------
Authorized Officer Authorized Officer
B-5-2
<PAGE>
APPENDIX B-6
FORM OF TALON
(On the front)
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE CODE.
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated under the laws of the State of California, U.S.A)
[Specified Currency and Principal Amount of Series]
EURO MEDIUM-TERM NOTES DUE [Year of Maturity]
Series No. [ ]
Serial No. [ ]
On and after [ ] further Coupons [and a further Talon] appertaining
to the Note to which this Talon appertains will be issued at the specified
office of any of the Paying Agents set out on the reverse hereof (and/or any
other or further Paying Agents and/or specified offices as may from time to
time be duly appointed and notified to the Noteholders) upon production and
surrender of this Talon.
This Talon may, in certain circumstances, become void under the Terms and
Conditions endorsed on the Notes to which this Talon appertains.
[SEAL]
ATTEST: TOYOTA MOTOR CREDIT
CORPORATION
By: -------------------------- By: ----------------------------
Authorized Officer Authorized Officer
B-6-1
<PAGE>
(Reverse of Talon)
ISSUING AND PRINCIPAL PAYING AGENT
The Chase Manhattan Bank
Trinity Tower
9 Thomas More Street
London E1 9YT
ENGLAND
PAYING AGENT
Chase Manhattan Bank Luxembourg S.A.
5 Rue Plaetis
L-2338
Luxembourg
and/or such other or further Agent and other or further Paying Agents and/or
specified offices as may from time to time be duly appointed by the Company
and notice of which has been given to the Noteholders.
B-6-2
<PAGE>
APPENDIX C
FORM OF CALCULATION AGENCY AGREEMENT
Dated , 199
TOYOTA MOTOR CREDIT CORPORATION
U.S. $16,000,000,000
EURO MEDIUM-TERM NOTES
------------------------------------
CALCULATION AGENCY AGREEMENT
------------------------------------
C-1
<PAGE>
TOYOTA MOTOR CREDIT CORPORATION
U.S.$16,000,000,000
EURO MEDIUM-TERM NOTES
CALCULATION AGENCY AGREEMENT
THIS AGREEMENT is made on __________, 199_ BETWEEN:
(1) TOYOTA MOTOR CREDIT CORPORATION of Torrance, California, U.S.A. (the
"Company"); and
(2) [name of calculation agent] (the "Calculation Agent", which expression
shall include its successor or successors for the time being as calculation
agent hereunder).
WHEREAS:
A. The Company has entered into the Second Amended and Restated Program
Agreement with Merrill Lynch International, Banque Paribas, Credit Suisse
First Boston (Europe) Limited, Goldman Sachs International, Lehman Brothers
International (Europe), Merrill Lynch Finance SA, J.P. Morgan Securities
Ltd., Morgan Stanley & Co. International Limited, Nomura International plc,
Swiss Bank Corporation and UBS Limited, dated July 24, 1997, under which up to
U.S.$16,000,000,000 (or its equivalent in other currencies or currency units)
in aggregate principal amount of Notes ("Notes") may be issued.
B. The Notes will be issued subject to and with the benefit of the Second
Amended and Restated Agency Agreement (the "Agency Agreement"), dated July 24,
1997 and entered into between the Company and The Chase Manhattan Bank as
Agent (the "Agent", which expression shall include its successor or successors
for the time being under the Agency Agreement) and the other parties named
therein. Terms not defined herein shall have the same meanings as in the
Agency Agreement.
NOW IT IS HEREBY AGREED that:
(1) Appointment of the Calculation Agent
The Company hereby appoints [name of calculation agent] as Calculation Agent
in respect of the Notes listed in the Schedule hereto which are for the time
being outstanding (the "Relevant Notes") for the purposes set out in Clause 2
below, all upon terms and conditions hereinafter mentioned.
C-2
<PAGE>
(2) Duties of Calculation Agent
The Calculation Agent shall in relation to each series of Relevant Notes (each
a "Series") perform all the functions and duties imposed on the Calculation
Agent by the terms and conditions of the relevant Series (the "Conditions").
Without limiting the foregoing, the Calculation Agent shall calculate, to the
extent applicable, the Rate of Interest, Interest Amount, Interest Payment
Date, principal and all other amounts, rates and dates which are required to
be determined or calculated under the Conditions for the Relevant Notes and
shall communicate such calculations to the Company and the Agent as soon as
practicable after such calculations are determined, but in any event, within
time periods sufficient to enable the Agent to publish the results of such
determinations in accordance with the terms of the Agency Agreement.
(3) Expenses
Except as provided in Clause 4 below, the Calculation Agent shall bear all
expenses incurred by it in connection with its said services.
(4) Indemnity
(a) The Company shall indemnify and keep indemnified the Calculation
Agent against any losses, liabilities, costs, claims, actions or demands
(including but not limited to, all reasonable costs, legal fees, charges and
expenses paid or incurred by the Calculation Agent in disputing or defending
any of the foregoing) which the Calculation Agent may incur or which may be
made against it (excluding consequential losses and losses of profit) as a
result of or in connection with its appointment or the exercise of its powers
and duties under this Agreement except such as may result from its own willful
default, negligence or bad faith or that of its officers, directors or
employees or any of them, or breach by it of the terms of this Agreement.
(b) The Calculation Agent shall indemnify and keep indemnified the
Company against any losses, liabilities, costs, claims, actions or demands
(including, but not limited to, all reasonable costs, legal fees, charges and
expenses paid or incurred by the Company in disputing or defending any of the
foregoing) which the Company may incur or which may be made against it
(excluding consequential losses and losses of profit) as a result of or in
connection with the breach by the Calculation Agent of the terms of this
Agreement or its willful default, negligence or bad faith or that of its
officers, directors or employees or any of them.
(5) Conditions of Appointment
(a) In acting hereunder in connection with the Relevant Notes, the
Calculation Agent shall not act as agent of the Company and shall not thereby
assume any obligations towards or relationship of agency or trust for or with
any of the owners or holders of the Relevant Notes or the coupons (if any)
appertaining thereto (the "Coupons").
(b) In relation to each Series, the Calculation Agent shall be obliged to
perform such duties and only such duties as are herein and in the Conditions
specifically set forth and no implied duties or obligations shall be read into
the Agreement or the Conditions against the Calculation Agent.
C-3
<PAGE>
(c) The Calculation Agent may consult with legal and other professional
advisers and the opinion of such advisers shall be full and complete
protection in respect of any action taken, omitted or suffered hereunder in
good faith and in accordance with the opinion of such advisers.
(d) The Calculation Agent shall be protected and shall incur no liability
for or in respect of any action taken, omitted or suffered in reliance upon
any instruction, request or order from the Company or the Agent, or any
notice, resolution, direction, consent, certificate, affidavit, statement,
cable, telex or other paper or document which it reasonably believes, after
making reasonable investigation of the same, to be genuine and to have been
delivered, signed or sent by the proper party or parties or upon written
instructions from the Company.
(e) The Calculation Agent, and any of its officers, directors and
employees, may become the owner of, or acquire any interest in, any Notes or
Coupons (if any) with the same rights that it or he or she would have if the
Calculation Agent were not appointed hereunder, and may engage or be
interested in any financial or other transaction with the Company and may act
on, or as depositary, trustee or agent for, any committee or body of holders
of Notes or Coupons (if any) or other obligations of the Company as freely as
if the Calculation Agent were not appointed hereunder.
(6) Termination of Appointment
(a) The Company may terminate the appointment of the Calculation Agent at
any time by giving to the Calculation Agent and the Agent at least 90 days
prior written notice to that effect, provided that, so long as any of the
Relevant Notes is outstanding, (i) such notice shall not expire less than 45
days before any date upon which any payment is due in respect of any Relevant
Notes and (ii) notice shall be given in accordance with Condition 16 at least
30 days prior to any removal of the Calculation Agent.
(b) Notwithstanding the provisions of Subclause 6(a) above, if at any
time (i) the Calculation Agent becomes incapable of action, or is adjudged
bankrupt or insolvent, or files a voluntary petition in bankruptcy or makes an
assignment for the benefit of its creditors or consents to the appointment of
an administrator, liquidator or administrative or other receiver of all or a
substantial part of its property, or if an administrator, liquidator or
administrative or other receiver of it or of all or a substantial part of its
property is appointed, or it admits in writing its inability to pay or meet
its debts as they may become due or suspends payment thereof or if any order
of any court is entered approving any petition filed by or against it under
the provisions of any applicable bankruptcy or insolvency law or if any public
officer takes charge or control of the Calculation Agent or of its property or
affairs for the purpose of rehabilitation, administration or liquidation or
(ii) the Calculation Agent fails duly to perform any function or duty imposed
on it by the Conditions and this Agreement, the Company may forthwith without
notice terminate the appointment of the Calculation Agent, in which event
notice thereof shall be given to the holders of the Relevant Notes in
accordance with Condition 16 of the Relevant Notes as soon as practicable
thereafter.
(c) The termination of the appointment pursuant to Subclause 6(a) or 6(b)
above of the Calculation Agent hereunder shall not entitle the Calculation
Agent to any amount by way of compensation but will be without prejudice to
any amount then accrued and due.
C-4
<PAGE>
(d) The Calculation Agent may resign its appointment hereunder at any
time by giving to the Company and the Agent at least 90 days prior written
notice to that effect. Following receipt of a notice of resignation from the
Calculation Agent, the Company shall promptly give notice thereof to the
holders of the Relevant Notes in accordance with Condition 16 of the Relevant
Notes.
(e) Notwithstanding the provisions of Subclauses 6(a), 6(b) and 6(d)
above, so long as any of the Notes is outstanding, the termination of the
appointment of the Calculation Agent (whether by the Company or by the
resignation of the Calculation Agent) shall not be effective unless upon the
expiry of the relevant notice a successor Calculation Agent has been
appointed.
(f) Any successor Calculation Agent appointed hereunder shall execute and
deliver to its predecessor and the Company an instrument accepting appointment
hereunder, and thereupon such successor Calculation Agent, without further
act, deed or conveyance, shall become vested with all the authority, rights,
powers, trusts, immunities, duties and obligations of such predecessor with
like effect as if originally named as the Calculation Agent hereunder.
(g) If the appointment of the Calculation Agent hereunder is terminated
(whether by the Company or by the resignation of the Calculation Agent), the
Calculation Agent shall on the date on which such termination takes effect
deliver to the successor Calculation Agent all records concerning the Relevant
Notes maintained by it (except such documents and records as it is obliged by
law or regulation to retain or not to release), but shall have no other duties
or responsibilities hereunder.
(h) Any corporation into which the Calculation Agent for the time being
may be merged or converted or any corporation with which the Calculation Agent
may be consolidated or any corporation resulting from any merger, conversion
or consolidation to which the Calculation Agent shall be a party shall, to the
extent permitted by applicable law, be the successor Calculation Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto. Notice of any such merger,
conversion or consolidation shall forthwith be given to the Company and the
Agent.
(i) Upon the termination of the appointment of the Calculation Agent, the
Company shall make all reasonable efforts to appoint a further bank or
investment bank as successor Calculation Agent.
(7) Notices
Any notice or communication given hereunder shall be sufficiently given or
served:
(a) if delivered in person to the relevant address specified below and,
if so delivered, shall be deemed to have been delivered at time of receipt; or
C-5
<PAGE>
(b) if sent by facsimile or telex to the relevant number specified below,
shall be deemed to have been delivered upon transmission provided such
transmission is confirmed by the answerback of the recipient (in the case of
telex) or when an acknowledgment of receipt is received (in the case of
facsimile):
The Company: TOYOTA MOTOR CREDIT CORPORATION
19001 South Western Avenue FN 17
Torrance, California 90509
Telephone No: (310) 787-6195
Fax No: (310) 787-6194
Attention: Corporate Treasury Manager
The Calculation Agent: -----------------------------------------
or to such other address and/or telex number of which notice in writing has
been given to the parties hereto in accordance with the provisions of this
Clause 7.
(8) Descriptive Headings
The descriptive headings in this Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
(9) Counterparts
This Agreement may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute one instrument.
(10) Governing Law
This Agreement is governed by, and shall be construed in accordance with, the
laws of the State of New York, United States of America, applicable to
agreements made and to be performed wholly within such jurisdiction.
IN WITNESS WHEREOF, this Agreement has been entered into as of the day and
year first above written.
TOYOTA MOTOR CREDIT CORPORATION
By:--------------------------------------
George Borst
Senior Vice President and General
Manager
[NAME OF CALCULATION AGENT]
By:--------------------------------------
C-6
<PAGE>
SCHEDULE OF RELEVANT NOTES
<TABLE>
<CAPTION>
Annotation
by
Series Maturity Principal Calculation
Number Issue Date Date Amount Agent
- -----------------------------------------------------------------------------
<C> <C> <C> <C> <C>
- -------- -------- -------- -------- --------
- -------- -------- -------- -------- --------
- -------- -------- -------- -------- --------
- -------- -------- -------- -------- --------
- -------- -------- -------- -------- --------
- -------- -------- -------- -------- --------
- -------- -------- -------- -------- --------
- -------- -------- -------- -------- --------
- -------- -------- -------- -------- --------
- -------- -------- -------- -------- --------
- -------- -------- -------- -------- --------
- -------- -------- -------- -------- --------
</TABLE>
C-7
<PAGE>
APPENDIX D
FORM OF OPERATING & ADMINISTRATIVE
PROCEDURES MEMORANDUM
Purchasers must confirm all trades directly with Toyota Motor Credit
Corporation (the "Company") and the Agent.
1. RESPONSIBILITIES OF THE AGENT
The Agent will be responsible for the following:
(1) in the case of Notes which are to be listed on a stock exchange (the
"relevant Stock Exchange"), distributing to the relevant Stock Exchange such
number of copies of the Pricing Supplement as it may reasonably require;
(2) where applicable, providing to the German Central Bank, at the end of
each calendar month, information on the amount, interest rate and other terms
of each issue of Deutsche Mark denominated Notes during the month, and such
other information as the German Central Bank may require from time to time;
(3) where applicable, providing the Ministry of Finance of Japan with all
required notifications and reports (including any monthly reports as to
amounts, issue dates and other terms of each Tranche of Yen-denominated
Notes); and
(4) where applicable, providing the Direction du Tresor with notification
of the amount, interest rate and other terms of each issue of French Franc
Notes and such other information as the Direction du Tresor may require from
time to time.
2. RESPONSIBILITIES OF THE LISTING AGENT/ LEAD MANAGER/ DEALER
(1) The Lead Manager/Dealer shall be responsible for preparing a Pricing
Supplement (substantially in the form of Annex B hereto) to the Offering
Circular giving details of the Notes to be issued and providing the Pricing
Supplement and a letter in the form set out in Annex C attached hereto to the
Agent and the Company;
(2) In the case of Notes to be listed on a Stock Exchange, the Listing
Agent or Lead Manager will be responsible for the following:
(a) For Notes (including French Franc Notes) to be listed on the
Paris Bourse, (i) obtaining the approval of the SBF to such listing, (ii)
obtaining the approval of the COB to the Pricing Supplement relating to such
Notes and (iii) publishing the notice legale relating to such Notes in the
BALO; and
(b) in the case of all other Notes to be listed on a Stock Exchange,
ensuring compliance with the Listing Rules and obtaining all necessary
approvals for listing the Notes on the relevant Stock Exchange. The Company
recognizes with respect to this Clause 2(2)(b) its continuing obligation so
long as any Notes under the Program are outstanding to
apprise the applicable Dealers of any material adverse change in its
consolidated financial position or its business operations.
D-1
<PAGE>
3. RESPONSIBILITIES OF THE COMPANY
(1) The Company shall execute and deliver the Pricing Supplement to the
Agent and the Lead Manager/Dealer.
4. SETTLEMENT
The settlement procedures set out in Annex A shall apply to each issue of
Notes, unless otherwise agreed between the Company and the relevant Dealer or
Dealers; with issues of Dual Currency or Indexed Notes more time may be felt
to be required to settle documentation which is not specifically included in
the Agency Agreement.
Trading Desk Information list is set out in Annex D.
D-2
<PAGE>
ANNEX A
SETTLEMENT PROCEDURES*****
Day Latest time Action
No later than 3:30 p.m. The Company or its designated agent may
Issue Date agree to terms with one or more of the
minus 3 Purchasers for the issue and purchase of
Notes. Once agreement is reached, the
Company or its designated agent telephones
the Agent (to be confirmed by the telex or
facsimile referred to below) to instruct
it to prepare, complete, authenticate and
issue a Temporary Global Note for each
Series of Notes which are to be purchased
by the relevant Purchaser(s), giving
details of such Notes.
4:00 p.m. If a Purchaser has reached agreement with
the Company by telephone, such Purchaser
confirms the terms of the agreement by
sending to the Company a Pricing
Supplement (substantially in the form set
out in Annex B) by telex or facsimile
together with a letter in the form set
forth in Annex C and copies the telex or
facsimile to the Agent.
5:00 p.m. The Company or its designated agent
confirms its instructions to the Agent
(including, in the case of Floating Rate
Notes, for the purposes of rate fixing) by
executing the Pricing Supplement sent to
the Company by the Purchaser and
delivering such executed copy of the
Pricing Supplement to the Agent and the
Purchaser by telex or facsimile.
The Agent telephones each of Euroclear,
Cedel Bank or such other relevant clearing
agency with a request for a common code
and ISIN number, if applicable, for each
Series of Notes agreed to be issued, which
Common Code and ISIN numbers, if
applicable, are notified by the Agent by
telephone to the Company or its designated
agent and each Purchaser which has reached
agreement with the Issuer. The Agent also
notifies the relevant Stock Exchange by
telex, facsimile or by hand of the details
of the Notes to be issued by sending the
Pricing Supplement to the relevant Stock
Exchange.
- ---------------------------
*****- In the case of a syndicated bond issue, certain of the Settlement
Procedures set forth below will be revised as appropriate.
D-3
<PAGE>
Issue Date 3:00 p.m. In the case of Floating Rate Notes, the
minus 2 days Agent notifies Euroclear, Cedel Bank or
such other relevant clearing agency, the
Company, the relevant Purchaser(s) and the
relevant Stock Exchange by telex or
facsimile of the interest rate for the
first interest period (if already
determined). Where the interest has not
yet been determined, this will be notified
in accordance with this paragraph as soon
as it has been determined.
The relevant Purchaser(s) instruct(s)
Euroclear, Cedel Bank or such other
relevant clearing agency to debit its
account and pay the subscription price,
against delivery of the Notes, to the
Agent's account with Euroclear, Cedel Bank
or such other relevant clearing agency on
the Issue Date and copies the instructions
to the Agent.
Issue Date 3:00 p.m. The Agent prepares and authenticates a
minus 1 Temporary Global Note for each Series of
Notes which are to be purchased by the
relevant Purchaser(s) on the Issue Date.
All Temporary Global Notes are then
delivered by the Agent to a common
depositary for Euroclear, Cedel Bank
and/or such other relevant clearing agency
specified in the related Pricing
Supplement and instructions are given by
the Agent to Euroclear, Cedel Bank or such
other relevant clearing agency, as the
case may be, to credit the Notes
represented by such Temporary Global Notes
to the Agent's distribution account. The
Agent further instructs Euroclear, Cedel
Bank or such other relevant clearing
agency, as the case may be, to debit from
the distribution account the principal
amount of Notes of each Series which each
Purchaser has agreed to purchase and to
credit such principal amount to the
account of such Purchaser with Euroclear,
Cedel Bank or such other relevant clearing
agency, against payment to the account of
the Agent of the subscription price for
the relevant Notes for value on the Issue
Date. The Company, the Purchaser(s) and
the Agent may agree to arrange for "free
delivery" to be made through the relevant
clearing system if specified in the
relevant Pricing Supplement.
D-4
<PAGE>
Issue Date Euroclear, Cedel Bank or such other
relevant clearing agency, as the case may
be, debit and credit accounts in
accordance with instructions received by
them.
The Agent pays to the Issuer the aggregate
subscription moneys received by it to such
account of the Company as shall have been
notified to the Agent from time to time.
On or subsequent The Agent notifies the Company of the
to the Issue Date issue of Notes giving details of each
Temporary Global Note and the principal
sum represented thereby.
Upon certification by the participating
Dealer or Dealers to the Agent that the
distribution with respect to a particular
Tranche of Notes has been completed, the
Agent shall determine and certify to Cedel
Bank, Euroclear or such other relevant
clearing agency the applicable Exchange
Date.
Explanatory Notes to Settlement Procedures
(a) Each "Day" is a day on which banks and foreign exchange markets are
open for business in London, counted in reverse order from the proposed Issue
Date.
(b) The "Issue Date" must be a Business Day. For the purposes of this
Memorandum, "Business Day" means a day which is both:
a day (other than a Saturday or a Sunday) on which commercial banks
and foreign exchange markets settle payments in London; and
either (1) in relation to Notes denominated in a Specified Currency
other than ECU, a day on which commercial banks and foreign exchange markets
settle payments in the principal financial center of the country of the
relevant Specified Currency (if other than London) or (2) in relation to Notes
denominated in ECU, an ECU Settlement Day (as defined in the ISDA Definitions,
as amended and updated from time to time). Unless otherwise provided in the
applicable Pricing Supplement, the principal financial center of any country
shall be as provided in the ISDA Definitions, as amended and updated from time
to time (except in the case of New Zealand and Australia, where the principal
financial center will be as specified in the Pricing Supplement).
(c) Times given are the approximate times for the taking of the action in
question and are references to London time. Such times can be modified upon
the mutual agreement of the Purchaser, the Agent and the Company.
(d) If at any time the Agent is notified by the Sponsor or the relevant
Stock Exchange that the listing of a Series of Notes has been refused or
otherwise will not take place, the Agent shall immediately notify the Company,
the Dealer and all the relevant Purchaser(s) (if not the Dealer).
D-5
<PAGE>
ANNEX B
FORM OF PRICING SUPPLEMENT
(to be completed by the Lead Manager/Dealer and executed by the Company)
D-6
<PAGE>
PRICING SUPPLEMENT
TOYOTA MOTOR CREDIT CORPORATION
(Incorporated as a California corporation)
U.S. $16,000,000,000
Euro Medium-Term Note Program
for the issue of Notes
with maturities of 1 month or longer
Series No. [ ]
[Specified Currency and Principal Amount of Series]
[Interest and Maturity Year of Notes]
------------------------
Issue price: [ ] per cent
------------------------
[Names of Managers in Syndicate, if applicable]
The date of this Pricing Supplement is [ ]
D-7
<PAGE>
[Date]
Toyota Motor Credit Corporation
19001 South Western Avenue
Torrance, California 90509
cc: Chase Manhattan Bank
Trinity Tower
9 Thomas More Street
London E1 9YT ENGLAND
[Lead Manager/Dealer on behalf of
the other Dealers]
Re: Toyota Motor Credit Corporation
Euro Medium-Term Note Program
This Pricing Supplement relates to the Notes described below and should be
read in conjunction with the Offering Circular dated July 24, 1997 relating to
Toyota Motor Credit Corporation's (the "Company") US $16,000,000,000 Euro
Medium-Term Note Program (the "Program") and all documents incorporated by
reference therein ("Offering Circular"). Capitalized terms used herein and
not otherwise defined have the same meanings ascribed to them in the Offering
Circular.
1. Series no. and, if not a new Series,
the date from which the Tranche being
issued is to form a single series with
the other Notes comprising the
Series: [ ]
2. Specified Currency (or Currencies in the
case of Dual Currency Notes): [ ]
3. Aggregate Principal Amount: [ ]
4. Interest/Payment Basis; and if more than
one, the dates during which each
Interest/Payment Basis will apply: [Fixed Rate/
Floating Rate/
Zero Coupon/
Index Linked/
Dual Currency]
5. Issue Date: [ ]
6. Specified Denomination(s): [ ]
7. Issue Price: [ ]
(a) All-in to the Company (prior
to expense reimbursement, if any): [ ]
(b) Proceeds to the Company (prior
to expense reimbursement, if any): [ ]
D-8
<PAGE>
8. Details relating to Partly Paid Notes;
amount of each payment comprising the
Issue Price and date on which each payment
is to be made: [ ]
9. Interest Commencement Date: [ ]
10. Maturity Date:
[ ]
11. Final Redemption Amount: [ ] percent of
the Principal Amount
of the Notes
12. Installment Dates
(Installment Note): [ ]
13. Installment Amounts
(Installment Note): [ ]% per [] in
principal amount
14. Fixed Rate of Interest (Fixed Rate Note): [ ]% per annum
15. Fixed Interest Date(s)
(Fixed Rate Note): [ ]
16. Initial Broken Amount
(Fixed Rate Note): [ ]
17. Final Broken Amount (Fixed Rate Note): [ ]
18. Applicable "Business Day Convention"
(if different from that in Condition 4(a)(i))
(Fixed Rate Note and Notes other than
Floating Rate Notes): [ ]
19. Applicable definition of "Business Day" [ ]
(if different from Condition 4(b)(i))
(Fixed Rate Note and Notes other than
Floating Rate Notes):
20. Other Terms relating to the calculation
of Interest (Fixed Rate Note): [ ]
21. Specified Interest Payment Dates
(Floating Rate Note): [ ]
22. Manner in which the Rate of Interest
is to be determined (Floating Rate Note): [ ]
(a) Reset Date(s) (Floating Rate Note): [ ]
(b) ISDA Determination - Spread/Margin: [+/-] [ ]% per annum
(c) ISDA Determination - Floating Rate Option: [ ]
(d) ISDA Determination - Designated Maturity: [ ]
D-9
<PAGE>
(e) Screen Rate Determination - Reference Rate: [ ]
(f) Screen Rate Determination - Margin: [+/-] [ ]% per annum
(g) Screen Rate Determination - Relevant Page: [ ]
23. Applicable "Reference Banks" definition (if
different from that in Condition 4(b)(iv)(E))
(Floating Rate Note): [ ]
24. Applicable "Interest Determination Date"
definition (if different from that in
Condition 4(b)(iv)(F)) (Floating Rate Note): [ ]
25. Applicable "Business Day Convention" (if
different from that in Condition 4(b)(i))
(Floating Rate Note): [ ]
26. Applicable definition of "Business Day" (if
different from Condition 4(b)(i))
(Floating Rate Note): [ ]
27. Minimum Rate of Interest (Floating Rate Note): [ ]% per annum
28. Maximum Rate of Interest (Floating Rate Note): [ ]% per annum
29. Agent responsible for determining Rate
of Interest (Floating Rate Note): [ ]
30. Accrual Yield (Zero Coupon Note): [ ]% per annum
31. Reference Price (Zero Coupon Note): [ ]
32. Other Formula or Basis for determining
amount payable under Condition 5(f)(iii)
(Zero Coupon Note): [give details]
33. Index (Indexed Notes): [give details]
(a) Formula (Indexed Notes): [give details]
(b) responsible for calculating the
principal/interest due (Indexed Notes): [ ]
(c) Provisions where calculation by
reference to Index and/or Formula is
impossible or impracticable: [ ]
34. Dual Currency Note:
(a) Rate(s) of Exchange/method of calculating
Rate(s) of Exchange (Dual Currency Note): [give details]
(b) Agent, if any, responsible for calculating
the principal and/or interest payable (Dual
Currency Note): [ ]
D-10
<PAGE>
(c) Provisions where calculation by reference
to Rate(s) of Exchange is impossible or
impracticable (Dual Currency Note): [ ]
(d) Person at whose option any Specified
Currency or Currencies is or are to be or
may be payable (Dual Currency Note): [ ]
35. Partly Paid Notes:
(a) Amount of each installment: []% per [] in
(b) Due dates of subsequent installments: [ ]
(c) Forfeiture date if subsequent
installment not paid: [ ]
(d) Rate of interest to accrue on installment
after due date: [ ]
(e) Other details: [ ]
36. Company's Optional Redemption - [Yes/No] if yes,
(a) Optional Redemption Date(s): [ ]
(b) Optional Redemption Amount(s) and
method, if any, of calculation of such
amount(s): [ ]
(c) If redeemable in part,
(i) Minimum Redemption Amount: [ ]
(ii) Higher Redemption Amount: [ ]
(d) The applicable period for notice to
Noteholders (if different from that set
out in Condition 5(d)): [ ]
(e) The applicable period for notice to
Agent (if different from that set out
in Condition 5(d)): [ ]
37. Redemption at the option of the Noteholders -,
[Yes/No] if yes
(a) Optional Redemption Date(s): [ ]
(b) Optional Redemption Amount(s) and/or
method, if any, of calculation of such
amounts: [ ]
38. Early Redemption Amount(s) payable on
redemption for taxation reasons or on event
of default and/or the method, if any, of
calculating the same (if required or if
different from that set out in Condition 5(f)): [ ]
D-11
<PAGE>
39. Talons for future Coupons to be attached to
definitive Notes (and dates on which such
Talons mature): [Yes/No. If yes,
give details]
40. In the case of Notes denominated in the
currency of one of the member states of
the European Union, whether the Notes [Yes/No. If yes,
will include a redenomination clause give details
providing for the redenomination of the including wording
Specified Currency in Euro: of Redenomination
Clause]
41. Details of relevant stabilizing manager, if any: [ ]
42. Additional selling restrictions: Selling restrictions,
including those
applicable to the
United States and
United Kingdom are
set out in the
Offering Circular and
Appendix B to the
Second Amended and
Restated Program
Agreement dated July
24, 1997 (the
"Program Agreement"),
and the Syndicate
Purchase Agreement
dated [ ], among
the Managers and the
Company.
43. Other terms or special conditions: [ ]
44. The relevant Euroclear and Cedel Bank Common
Code and ISIN Numbers: [ ]
45. Details of SICOVAM or any other
additional/alternative clearance
system approved by the Company and the Agent: [ ]
46. Notes to be listed on the London Stock
Exchange, the Paris Bourse or other stock
exchange: [Yes (give details)
/No]
47. Whether Notes are convertible at option
of Company/Holder into Notes of another
Interest/Payment Basis, Dates of Conversion
or Option Exercise/Interest Payment Basis/other
relevant terms: [ give details ]
D-12
<PAGE>
48. Whether interests in the Temporary Global
Note are exchangeable for interests in the
Permanent Global Note and/or Definitive
Notes and in the case of Definitive Notes,
any notice period required: [ ]
49. Method of Distribution: [Syndicated/non-
syndicated]
(a) If syndicated, names of Managers and,
if non-syndicated, name of Dealer: [ give details ]
50. Further Issues: The Company may from
time to time without
the consent of the
Noteholders create
and issue further
securities having the
same terms and
conditions as the
Notes so that the
same shall be
consolidated and form
a single series with
such Notes and
references in these
conditions to "Notes"
shall be construed
accordingly.
51. Cost, if any, to be borne by Noteholder in
connection with exchanges for security printed
Definitive Notes: [ ]
52. Purchaser's account number with
[Euroclear/Cedel Bank] to which the
Notes are to be credited: [ ]
53. In the case of Notes listed on the
Paris Bourse:
(a) Number of Notes to be issued in
each Specified Denomination: [ ]
(b) SICOVAM number or, in the case
of Partly Paid Notes, SICOVAM numbers,
if any: [ ]
(c) Paying agent in France (if any): [ ]
(d) address in Paris where documents
incorporated by reference (or
otherwise to be made available
for inspection may be inspected): [ ]
(e) Specialist broker: [ ]
D-13
<PAGE>
(f) Responsibility statement for
Pricing Supplement, in the
required form duly completed to
meet listing requirements on the
Paris Bourse: [ ]
(f) Responsibility statement:
PERSONNES QUI ASSUMENT
LA RESPONSABILITE DE LA NOTE D'INFORMATION
COMPOSEE DE LA PRESENTE NOTE D'OPERATION (PRICING SUPPLEMENT)
[DE LA NOTE D'INFORMATION AYANT RECU DE LA COB LE
VISA NO [ ] DU [DATE])
ET DU DOCUMENT DE BASE (OFFERING CIRCULAR)
1. Au nom de l'emetteur
A la connaissance de l'emetteur, les donnees de la presente "Note
d'Information" sont conformes a la realite et ne comportent pas d'omission de
nature ... en alterer la portee.
Aucun element nouveau, autres que ceux mentionnes dans la presente Note
d'Operation, intervenu depuis.
le [ ] juillet 1997, date du visa n P 97- [ ] appose par la
Commission des Operations de Bourse sur le Document de Base (constitue du
document denomme "Offering Circular", du rapport annuel de l'emmeteur au 30
septembre, 1996 sous forme de 10K les rapports trimestriels de l'emmeteur au
31 decembre, 1996 et au 31 mars, 1997 sous forme de 10Q),
le [ ], date du visa no [ ] appose par la Commission des Operations
de Bourse sur la Note
d'Information.
n'est susceptible d'affecter de maniere significative la situation financiere
de l'emetteur dans le contexte de la presente emission.
Toyota Motor Credit Corporation
.............................................................................
[Name and title of signatory]
2. Au nom de la banque presentatrice
A la connaissance de la banque presentatrice, les donnees de la presente Note
d'Information sont conformes a la realite et ne comportent pas d'omission de
nature ... en alterer la portee.
[Name of relevant Dealer/lead manager]
[Name and title of signatory]
D-14
<PAGE>
(g) a statement in French in respect of the Pricing Supplement in the
following form:
La notice legale sera publiee au Bulletin des Annonces Legales Obligatoires
(BALO) du [ ] [date]. La presente "Note d'Information" ne peut etre
distribuee en France avant la date effective de cotation de l'emprunt ... la
Bourse de Paris et la publicite legale au BALO; and
(h) The registration and visa numbers allocated by the COB in respect of the
Offering Circular and the Pricing Supplement in the following form:
VISA DE LA COMMISSION DES OPERATIONS DE BOURSE
En vue de la cotation ... Paris des obligations, et par application des articles
6 et 7 de l'ordonnance no. 67-833 du 28 septembre 1967, la Commission des
Operations de Bourse a enregistre le Document de Base sous le no [ ]
du ___ juillet 1997 et a appose sur la presente "Note d'Information" la visa
no. [ ] du [ ] [date].
D-15
<PAGE>
Acceptance on behalf of the
Issuer of the terms of the Pricing Supplement
as of the date above first written:
TOYOTA MOTOR CREDIT CORPORATION
By:
----------------------------------
The following information is to be included only in the version of the Pricing
Supplement which is submitted to the London Stock Exchange in the case of
Notes to be listed on such London Stock Exchange:
Application is hereby made to list this issue of Notes pursuant to the listing
of the U.S. $16,000,000,000 Euro Medium Term Note Program of Toyota Motor
Credit Corporation (as from [insert date of or prior to settlement date for
the issuance of the Notes]).
THE CHASE MANHATTAN BANK
(as Agent)
By:
----------------------------------
D-16
<PAGE>
ANNEX C
FORM LETTER FROM LEAD MANAGER/DEALER
[Date]
To: [Issuer]
c.c.: [Agent]
[ISSUER]
[Title of relevant tranche of Notes (specifying type of Notes]
issued pursuant to the US$16,000,000,000 Euro Medium Note Program
of Toyota Motor Credit Corporation
We hereby confirm the agreement for the issue to us of [describe issue] Notes
due [ ] (the "Notes") under the above Program pursuant to the terms of issue
set out in the Pricing Supplement which we are faxing herewith.
[The selling commission in respect of the Notes will be [ ] percent. of the
nominal amount of the Notes and will be deductible from the net proceeds of
the issue.]
The Notes are to be credited to [Euroclear/Cedel Bank] account number
[ ] in the name of [Name of Dealer].
Please confirm your agreement to the terms of issue by signing and faxing to
us a copy of the Pricing Supplement in the form attached hereto.
For and on behalf of [Name of Dealers].
By:
-------------------------------------------
Authorized signatory
D-17
<PAGE>
ANNEX D
TRADING DESK INFORMATION
The Company
TOYOTA MOTOR CREDIT CORPORATION
19001 South Western Avenue FN17
Torrance, California 90509
Telephone No: (310) 787-6195; Fax No: (310) 787-6194
Attention: Corporate Treasury Manager
The Dealers
BANQUE PARIBAS GOLDMAN SACHS INTERNATIONAL
33 Wigmore Street Peterborough Court
London W1H OBN 133 Fleet Street
Telephone: 0171 383 2000 London EC4A 2BB
Telefax: 0171 895 2555 Telephone: 0171 744 1000
Telex: 296723 PBRCAP Telefax: 0171 774 4123
Attn: Euro Medium Term Note Desk Telex: 940 12165 GSHH G
Attn: Euro Medium Term Note Desk
LEHMAN BROTHERS INTERNATIONAL (EUROPE) MERRILL LYNCH INTERNATIONAL
1 Broadgate Ropemaker Place
London EC2M 7HA25 Ropemaker Street
Telephone: 0171 260 2126 London EC2Y 9LY
Telefax: 0171 260 2778 Telephone: 0171 867 3995
Telex: 888881 LEHMAN G Telefax: 0171 867 4327
Attn: EMTN Trading Desk Telex: 8811047 MERLYN G
Attn: EMTN Trading and
Distribution Desk
NOMURA INTERNATIONAL PLC UBS LIMITED
Nomura House 100 Liverpool Street
1 St. Martin's-le-Grand London EC2M 2RH
London EC1A 4NP Telephone: 0171 901 4253
Telephone: 0171 236 8056 Telefax: 0171 901 1439
Telefax: 0171 521 2616 Telex: 8812800 UBSLTD G
Telex: 883119 NOMURA G Attn: Euro-Medium Term Note Desk
Attn: MTN Trading
CREDIT SUISSE FIRST BOSTON MERRILL LYNCH FINANCE SA
(EUROPE) LIMITED 112 avenue kleber
One Cabot Square 75761 Paris Cedex 16 France
Canary Wharf Telephone: 331 5365 5910
London E14 4QJ Telefax: 331 5365 5610
Telephone: 0171 888 4021 Telex: 33149520502
Telefax: 0171 888 3719 Attn: EMTN Trading and
Telex: 892132 CSFB G Distribution Desk
Attn: MTN Trading Desk
D-18
<PAGE>
J.P. MORGAN SECURITIES LTD. MORGAN STANLEY & CO.
60 Victoria Embankment INTERNATIONAL LIMITED
London EC4Y 0JP25 Cabot Square
Telephone: 0171 779 3469 Canary Wharf
Telefax: 0171 325 8240 Canary Wharf
Telex: 8954804 MGLTD G London E14 4QA
Attn: Euro Medium Term Note Telephone: 0171 425 7730
Desk Telefax: 171 425 4397
Telex: 881 2564
Attn: Head of Transaction
Management Group
SWISS BANK CORPORATION
1 High Timber Street
London EC4V 35B
Telephone: 0171 329 0329
Telefax: 0171 329 2364
Telex: 887434 SBCO G
Attn: MTN Group
D-19
<PAGE>
APPENDIX E
FORM OF THE NOTES
E-1
<PAGE>
FORM OF THE NOTES
Each Tranche of Notes will initially be represented by one or more
temporary global Notes, without receipts, interest coupons or talons, which
will be delivered to a common depositary for Euroclear and Cedal Bank.
If an interest payment date for any Notes occurs while such Notes are
represented by a temporary global Note, the related interest payment will be
made against presentation of the temporary global Note only to the extent that
certification of non-U.S. beneficial ownership (in the form set out in the
temporary global Note) has been received by Euroclear or Cedel Bank. Interests
in the temporary global Note will be exchangeable for interests in a permanent
global Note and/or for security printed definitive Notes (as specified under
"Terms and Conditions of the Notes" and in the applicable Pricing Supplement)
not earlier than the date (the "Exchange Date") which is 40 days after the
date on which the temporary global Note is issued, provided that certification
of non-U.S. beneficial ownership has been received. No interest payments will
be made on a temporary global Note after the Exchange Date.
Payments of principal or interest (if any) in respect of a permanent
global Note will be made through Euroclear and Cedel Bank against presentation
or surrender, as the case may be, of the permanent global Note without any
requirement for further certification. A permanent global Note will be
exchangeable in whole, but not in part, for security printed definitive Notes
with, where applicable, receipts, interest coupons and talons attached not
earlier than the Exchange Date (i) at the option of TMCC; (ii) at the option
of Noteholders, unless specified otherwise in the applicable Pricing
Supplement and (iii) under certain other limited circumstances set forth under
"Terms and Conditions of the Notes". If a portion of the Notes continue to be
represented by the temporary global Note after the issuance of definitive
Notes, the temporary global Note shall thereafter be exchangeable only for
definitive Notes, subject to certification of non-U.S. beneficial ownership.
Unless specified in the applicable Pricing Supplement, investors shall have
the right to require the delivery of definitive Notes; provided, however, that
such delivery may be conditioned on written notice, as specified in the
applicable Pricing Supplement, from Euroclear or Cedel Bank (as the case may
be) acting on instructions of the holders of interest in the temporary or
permanent global Note and/or on the payment of costs in connection with the
printing and distribution of the definitive Notes. No definitive Note
delivered in exchange for a permanent or temporary global Note shall be mailed
or otherwise delivered to any locations in the United States of America in
connection with such exchange. Temporary and permanent global Notes and
definitive Notes will be issued by The Chase Manhattan Bank, London Office, as
issuing and (unless specified otherwise in the applicable Pricing Supplement)
principal paying agent and, unless specified otherwise in the applicable
Pricing Supplement, as calculation agent (the "Agent", which expression
includes any successor agents or any other calculation agent specified in the
applicable Pricing Supplement) pursuant to a Second Amended and Restated
Agency Agreement dated as of July 24, 1997, (the "Agency Agreement"), and made
between TMCC, the Agent and the other paying agents named therein (together
with the Agent, the "Paying Agents", which expression includes any additional
or successor paying agents). Until exchanged in full, the holder of an
interest in any global Note shall in all respects be entitled to the same
benefits as the holder of definitive Notes, receipts and interest coupons,
except as set out in the terms and conditions applicable thereto.
E-2
<PAGE>
If specified in the applicable Pricing Supplement, other clearance
systems (including in the case of Notes listed on the Paris Bourse, Sicovam)
capable of complying with the certification requirements set forth in the
temporary global Note may be used in addition to or in lieu of Euroclear and
Cedel Bank.
The Pricing Supplement will contain such information (if any) as is
necessary to comply with the Banking Act 1987 (Excempt Transactions)
Regulations 1997.
Temporary and permanent global Notes and definitive Notes will be issued
in bearer form only. The following legend will appear on all global Notes,
definitive Notes, receipts and interest coupons:
"Any United States person (as defined in the Internal Revenue Code of the
United States) who holds this obligation will be subject to limitations
under the United States income tax laws, including the limitations
provided in sections 165(j) and 1287(a) of the Internal Revenue Code."
The sections referred to provide that United States holders, with
certain exceptions, will not be entitled to deduct any loss on Notes, receipts
or interest coupons and will not be entitled to capital gains treatment of any
gain on any sale, disposition or payment of principal in respect of Notes,
receipts or interest coupons.
The Pricing Supplement relating to each Tranche will contain such of the
following information as is applicable in respect of such Notes (all
references to numbered Conditions being to the Terms and Conditions of the
relevant Notes):
(i) the Series number;
(ii) if not a new Series, the date from which the Tranche of Notes
being issued is to form a single series with the other Notes comprising
that Series;
(iii) the currency (which expression shall include ECU and other
currency units) in which the Notes are denominated and, in the case of
Dual Currency Notes (as defined below), the currency or currencies in
which payment in respect of the Notes is to be made (each a "Specified
Currency");
(iv) the aggregate principal amount of the Notes to be issued;
(v) the interest and/or payment basis (the "Interest/Payment
Basis") of the Notes, which may be one or more of the following:
(a) Notes bearing interest on a fixed rate basis ("Fixed Rate
Notes");
(b) Notes bearing interest on a floating rate basis ("Floating Rate
Notes");
(c) Notes issued on a non-interest bearing basis ("Zero Coupon
Notes");
E-3
<PAGE>
(d) Notes with respect to which principal and/or interest is
calculated by reference to an index and/or a formula ("Indexed
Notes"); and/or
(e) Notes with respect to which principal and/or interest is
payable in one or more Specified Currencies other than the
Specified Currency in which they are denominated ("Dual
Currency Notes");
(vi) if the Notes are not to have a single specified
Interest/Payment Basis continuously from the Issue Date to the stated
maturity thereof, the dates from (and including) and to (but excluding)
which such Notes will have each specified Interest/Payment Basis;
(vii) the date on which the Notes will be issued (the "Issue Date");
(viii) the denomination(s) of such Notes (each a "Specified
Denomination");
(ix) the price (generally expressed as a percentage of the
principal amount of the Notes) at which the Notes will be issued (the
"Issue Price");
(x) in the case of Notes which are to be issued on a partly paid
basis ("Partly Paid Notes"), the amount of each installment comprising
the Issue Price and the date on which each payment is to be made and the
consequences (if any) of failure to make any such payment;
(xi) in the case of interest-bearing Notes, the date from which such
Notes bear interest (the "Interest Commencement Date"), which may
or may not be the Issue Date;
(xii) the date on which such Notes (unless previously redeemed
or purchased and canceled) will be redeemed (the "Maturity Date");
(xiii) the amount at which each Note will be redeemed under (xii)
above (the "Final Redemption Amount"), generally expressed as a
percentage of the principal amount of the Notes and/or, in the case of
Indexed Notes or Dual Currency Notes, as specified in accordance with
(xviii) or (xix) below;
(xiv) in the case of Notes redeemable in installments:
(a) the date on which each installment is payable (each
an"Installment Date"); and
(b) the amount, generally expressed as a percentage of the
principal amount of the Notes, of each such installment (each
an "Installment Amount");
(xv) in the case of Fixed Rate Notes (and for subclauses (e) and
(f), Notes other than Floating Rate Notes):
E-4
<PAGE>
(a) the rate, generally expressed as a percentage rate per annum,
at which the Notes bear interest (the "Fixed Rate of
Interest"), which may remain the same throughout the life of
the Notes or increase and/or decrease;
(b) the date(s) in each year on which interest is payable
throughout the life of the Notes (each a "Fixed Interest
Date");
(c) where the period from the Interest Commencement Date to the
next Fixed Interest Date differs from the period between
subsequent Fixed Interest Dates, the amount of the first
payment of interest (the "Initial Broken Amount");
(d) where the Maturity Date is not a Fixed Interest Date, the
amount of the final payment of interest (the "Final Broken
Amount"); and
(e) the applicable Business Day Convention (if different from that
set out in Condition 4(a)(i));
(f) the applicable definition of "Business Day" (if different from
that set out in Condition 4(b)(i));
(g) any other terms relating to the particular method of
calculating interest for such Notes;
(xvi) in the case of Floating Rate Notes:
(a) the date(s) in each year on which interest is payable throughout
the life of the Note ("Interest Payment Dates").
(b) the manner in which the rate of interest (the "Rate of
Interest") is to be determined, including:
(1) the date(s) on which the interest rate is to be reset (the
"Reset Date");
(2) where the Rate of Interest is to be determined by
reference to the ISDA Agreement and Confirmation (as
defined and described respectively in Condition 4(b)(iii))
and Condition 4(b)(iii) applies, the "Floating Rate
Option" (as defined below), "Designated Maturity" (as
defined below) and margin (the "Margin") (which Margin may
remain the same throughout the life of the Notes or
increase and/or decrease);
(3) where the Rate of Interest is to be determined as provided
in Condition 4(b)(iv) ("Screen Rate Determination"):
(A) the reference rate (the "Reference Rate") by which
the Rate of Interest is to be determined;
E-5
<PAGE>
(B) the Margin, if any, (expressed as a percentage rate
per annum) over or under the Reference Rate by which
the Rate of Interest is to be determined (which
Margin may remain the same throughout the life of the
Notes or increase and/or decrease) specifying whether
any such Margin is to be added to, or subtracted
from, the Reference Rate; and
(C) the page, whatever its designation, on which the
Reference Rate is for the time being displayed on the
Reuters Monitor Money Rates Service or the
appropriate Associated Press-Dow Jones Telerate
Service or such other service as is indicated in the
applicable Pricing Supplement; and
(4) where the Rate of Interest is to be calculated otherwise
than by reference to (1) or (2) above, details of the
basis for determination of the Rate of Interest and any
alternative fall-back provisions;
(c) the applicable definition of "Reference Banks" (if
different from that set forth in Condition 4(b)(iv)(E));
and
(d) the applicable definition of "Interest Determination Date"
(if different from that set out in Condition 4(b)(iv)(F));
(e) the applicable Business Day Convention (if different from
that set out in Condition 4(b)(i));
(f) the applicable definition of "Business Day" (if different
from that set out in Condition 4(b)(i));
(g) the minimum Rate of Interest, if any, at which the Notes
will bear interest, which may remain the same throughout
the life of the Notes or increase and/or decrease;
(h) the maximum Rate of Interest, if any, at which the Notes
will bear interest, which may remain the same throughout
the life of the Notes or increase and/or decrease; and
(i) if different from the Agent, details of the agent
responsible for calculating (xvi)(b) above;
(xvii) in the case of Zero Coupon Notes:
(a) the accrual yield in respect of such Notes (the "Accrual
Yield") expressed as a percentage rate per annum;
(b) the reference price attributed to the Notes on issue (the
"Reference Price"); and
(c) any other formula or basis for determining the amount
payable, in each case for the purposes of Condition
5(f)(iii);
E-6
<PAGE>
(xviii) in the case of Indexed Notes:
(a) the index (the "Index") to which amounts payable in
respect of principal and/or interest are linked and/or the
formula (the "Formula") to be used in determining the
amounts of principal and/or interest due;
(b) the agent responsible for calculating the amount of
principal and/or interest due; and
(c) the provisions regarding calculation of principal and/or
interest in circumstances where such calculation by
reference to the Index and/or the Formula is impossible
and/or impracticable;
(xix) in the case of Dual Currency Notes:
(a) the exchange rate(s) or basis of calculating the exchange
rate(s) to be used in determining the amounts of principal
and/or interest payable in the Specified Currencies (the
"Rate(s) of Exchange");
(b) the agent, if any, responsible for calculating the amount
of principal and/or interest payable in the Specified
Currencies;
(c) the provisions regarding calculation of principal and/or
interest in circumstances where such calculation by
reference to the Rate(s) of Exchange is impossible and/or
impracticable; and
(d) the person at whose option any Specified Currency or
Currencies is or are to be or may be payable;
(xx) in the case of Partly Paid Notes:
(a) the amount of each installment (expressed as a percentage
of the principal amount of each Note) of the Issue Price
for such Notes;
(b) the due date(s) for any subsequent installments of the
Issue Price;
(c) the date (if any) after which a holder shall forfeit any
relevant Partly Paid Notes should payment of any
subsequent installment(s) not be made on or prior to such
date together with accrued interest;
(d) the rate(s) of interest to accrue on the first and any
subsequent installment(s) after the due date for payment
of such installment(s); and
(e) any other relevant information;
E-7
<PAGE>
(xxi) whether the Notes are to be redeemable at the option of
TMCC (other than for taxation reasons) and/or the Noteholders and, if so:
(a) each date upon which redemption may occur (each an
"Optional Redemption Date") which, in the case of Notes
denominated in Sterling or French Franc Notes, may not be
prior to one year from the Issue Date and in the case of
Notes denominated in DM, may not be prior to two years
from the Issue Date;
(b) each redemption amount for the Notes (each an "Optional
Redemption Amount") and/or the method, if any, of
calculating the same; and
(c) in the case of Notes redeemable by TMCC in part, the
minimum principal amount of the Notes permitted to be so
redeemed at any time (the "Minimum Redemption Amount") and
any greater principal amount of the Notes permitted to be
so redeemed at any time (each a "Higher Redemption
Amount"), if any;
(d) the applicable period for notice to noteholders (if
different from that set out in Condition 5(d)); and
(e) the applicable period for notice to the Agent (if
different from that set out in Condition 5(d)),
(xxii) the redemption amount (the "Early Redemption Amount") with
respect to the Notes payable on redemption for taxation reasons or
following an Event of Default and/or method, if any, of calculating the
same if required to be specified by, or if different from that set out
in, Condition 5(f);
(xxiii) whether talons for future coupons or receipts are to be
attached to definitive Notes on issue and, if so, the date on which such
talons mature;
(xxiv) in the case of the Notes denominated in the currency of one
of the member states of the European Union, whether the Notes
will include a redenomination clause providing for the
redenomination of the Specified Currency in Euro (a
"Redenomination Clause") and, if so specified, the wording of
the Redenomination Clause in full.
(xxv) details of the relevant stabilizing manager (if any);
(xxvi) any additional selling restrictions which are required;
(xxvii) details of any other relevant terms of such Notes or
special conditions not inconsistent with the provisions of the Agency
Agreement;
(xxviii) the relevant Euroclear and Cedel Bank Common Code and ISIN
Number;
(xxix) details of any additional or alternative clearance system
(including, if applicable, Sicovam) approved by TMCC and the Agent;
E-8
<PAGE>
(xxx) whether or not the Notes are to be listed on the London
Stock Exchange, the Paris Bourse or any other agreed stock exchange;
(xxxi) whether the Notes are convertible automatically or at the
option of TMCC and/or the holders of Notes into Notes of another
Interest/Payment Basis, the date(s) upon which such conversion will occur
or such option(s) may be exercised and the Interest/Payment Basis and
other relevant terms;
(xxxii) whether the temporary global Note initially representing
the Notes will be exchangeable for a permanent global Note and/or
definitive Notes and any notice period applicable to an exchange for
definitive Notes;
(xxxiii) method of distribution:
(a) if syndicated, the names of the relevant managers;
(b) if non-syndicated, the name of the relevant dealer;
(xxxiv) whether TMCC may from time to time without the consent of
the Noteholders create and issue further securities having the same
terms and conditions as the Notes described in the Pricing Supplement so
that the same shall be consolidated and form a single series with such
Notes;
(xxxv) cost, if any, to be borne by the Noteholders in connection
with exchanges for security printed Definitive Notes;
(xxxvi) purchaser's account number with [Euroclear/Cedel Bank] to
which the Notes are to be credited; and
(xxxvii) in the case of any Notes listed on the Paris Bourse:
(a) the number of Notes to be issued in each Specified
Denomination;
(b) the Sicovam number or, in the case of Partly Paid Notes,
Sicovam numbers, if any;
(c) the name and specified office of any paying agent in
France;
(d) the address in Paris where any relevant documents will be
available for inspection and a list of such documents;
(e) the specialist broker in the case of an issue of French
Franc Notes;
(f) a statement in French signed manually or in facsimile by a
person duly authorized on behalf of TMCC and the relevant
Purchaser or, in the case of a syndicated issue of Notes,
the relevant lead manager accepting responsibility for the
information contained in the Pricing Supplement, in the
following form:
E-9
<PAGE>
PERSONNES QUI ASSUMENT
LA RESPONSABILITE DE LA NOTE D'INFORMATION
COMPOSEE DE LA PRESENTE NOTE D'OPERATION (PRICING SUPPLEMENT)
(DE LA NOTE D'INFORMATION AYANT RECU DE LA COB LE
VISA NO /DU )
-------- ---------
ET DU DOCUMENT DE BASE (OFFERING CIRCULAR)
1. Au nom de l'emetteur
A la connaissance de l'emetteur, les donnees de la presente "Note
d'Information" sont conformes a la realite et ne comportent pas d'omission de
nature a en alterer la portee.
Aucun element nouveau, autres que ceux mentionnes dans la presente
Note d'Operation, intervenu depuis:
- le 22 Juillet 1997, date du no P97-255 appose par la Commission
des Operations de Bourse sur le Document de Base (constitue du document
denomme "Offering Circular", du rapport annuel de l'emetteur au 30 septembre,
1996 sous forme de 10K et les rapports trimestriels de l'emetteur au 31
decembre, 1996 et au 31 mars, 1997 sous forme de 10Q),
- le [ ], date du visa no. [ ] appose par la
Commission des Operations de Bourse sur la Note
d'Information,
n'est susceptible d'affecter de maniere significative la
situation financiere de l'emetteur dans le contexte de la
presente emission.
Toyota Motor Credit Corporation
-------------------------------------------------------------
[Name and title of signatory]
2. Au nom de la banque presentatrice
A la connaissance de la banque presentatrice, les donnees de la
presente Note d' Information sont conformes a la realite et ne comportent pas
d'omission de nature a en alterer la portee.
(Name of relevant Dealer/lead manager)
-------------------------------------------------------------
[Name and title of signatory]
(g) a statement in French in respect of the Pricing Supplement in the
following form:
La notice legale sera publiee au Bulletin des Annonces Legales
Obligatoires (BALO) du (date). La presente "Note d'Information" ne peut
etre distribuee en France avant la date effective de cotation de
l'emprunt a la Bourse de Paris et la publicite legale au BALO; and
E-10
<PAGE>
(h) the registration and visa numbers allocated by the COB in respect of
the Offering Circular and the Pricing Supplement in the following
form:
VISA DE LA COMMISSION DES OPERATIONS DE BOURSE
En vue de la cotation a Paris des obligations, et par application des
articles 6 et 7 de l'ordonnance no. 67-833 du 28 septembre 1967, la
Commission des Operations de Bourse a enregistre le Document de Base
sous le no. P97-255 du 22 Juillet 1997 et a appose sur la
presente "Note d'Information" la visa no. du (date).
If the applicable Pricing Supplement specifies any modifications to the
Terms and Conditions of the Notes in relation to a particular issue as
described below, it is expected that, to the extent that such modifications
(not being significant for the purposes of section 147 of the Financial
Services Act 1986) relate only to Conditions 1, 3, 4, 5 (except Condition
5(b)), 6, 14 and 16, they will not necessitate the preparation and issue of a
supplementary Offering Circular or listing particulars. If the Terms and
conditions of the Notes are to be modified in any other respect (as would be
the case, for example, for an issue of subordinated Notes), it is expected
that a supplementary Offering Circular or listing particulars or, if
appropriate, further listing particulars describing the modifications will be
prepared and issued.
E-11
<PAGE>
Exhibit 10.1(c)
AMENDMENT NO. 2 TO OPERATING AGREEMENT
This Amendment No. 2 dated December 1, 1997 (the "Amendment") to the
Operating Agreement dated January 16, 1984, as amended by an Amendment No. 1
dated May 14, 1996 (the "Agreement") by and among Toyota Motor Sales, U.S.A.,
Inc. ("TMS USA"), a California corporation, Toyota Motor Credit Corporation
("TMCC"), a California corporation and Toyota Motor Manufacturing North
America, Inc., a Kentucky corporation ("TMMNA"), is entered into with
reference to the following facts:
WHEREAS, TMS USA and TMCC entered into an agreement dated as of
January 16, 1984 by which TMS agreed, among other things, to provide a fixed
charge coverage covenant and to make certain other agreements with TMCC; and
WHEREAS, TMS USA and TMCC now desire to amend the Agreement to make TMMNA
a party with respect to certain of the obligations of TMS USA to TMCC.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
herein contained, the parties hereto agree as follows:
A. Section 6 of the Agreement is hereby amended and restated in its
entirety as follows:
"6. TMS USA and TMMNA will each provide necessary equity
contributions or any other financial mechanism it deems appropriate under the
circumstances to assure that TMCC, on a consolidated basis, maintains a
minimum coverage on fixed charges of 1.10 times such charges in any fiscal
quarter."
B. Section 8 of the Agreement is hereby amended and restated in its
entirety as follows:
"8. Any loans made by either TMS USA or TMMNA to TMCC will be
subordinated at all times to all other indebtedness of TMCC."
C. Section 10 of the Agreement is hereby amended and restated in its
entirety as follows:
"10. This agreement is not a guaranty by TMS USA or by TMMNA of any
receivables, debts or liabilities of TMCC."
D. Except as specifically set forth herein, all other provisions of the
Agreement shall remain in full force and effect.
E. The provisions of this Amendment shall become effective only at such
time as all TMCC commercial paper issued prior to the date of this Amendment
ceases to be outstanding. Until such time, the provisions of the Agreement,
without taking into account the changes effected by this Amendment, shall
continue in full force and effect.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective officers thereunto duly authorized
as of the day and year first above written.
TOYOTA MOTOR SALES, U.S.A., INC.
By: /S/ DOUGLAS M. WEST
----------------------------
Name: Douglas M. West
Title: Senior Vice President
and Secretary
TOYOTA MOTOR MANUFACTURING
NORTH AMERICA, INC.
By: /S/ KAZUO NISHIDA
----------------------------
Name: Kazuo Nishida
Title: Vice President and Treasurer
TOYOTA MOTOR CREDIT CORPORATION
By: /S/ GEORGE E. BORST
----------------------------
Name: George E. Borst
Title: Senior Vice President and
General Manager
<PAGE>
Ex 10.5(f)
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 23, 1997 among
TOYOTA MOTOR CREDIT CORPORATION (the "Borrower"), the BANKS listed on the
signature pages hereof (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a Three-Year Credit
Agreement dated as of September 29, 1994 and amended and restated as of
September 24, 1996 (the "Agreement");
WHEREAS, no Loans are outstanding under the Agreement at the date hereof; and
WHEREAS, the parties hereto desire to amend the Agreement as set forth herein
and to restate the Agreement in its entirety to read as set forth in the
Agreement with the amendments specified below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement shall have the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in
the Agreement shall from and after the date hereof refer to the Agreement as
amended hereby.
SECTION 2. Amendment of the Agreement
(a) Each reference to "1995" in the definition of "Borrower's 1995 Form
10-K" and in Section 4.04(a) is changed to "1996".
(b) Each reference to "1996" in the definition of "Borrower's Latest Form
10-Q" and in Sections 4.04(b) and (c) is changed to "1997".
(c) The date "September 24, 2001" appearing in the definition of
"Termination Date" is changed to "September 23, 2002".
(d) Section 5.01(e) is amended in its entirety to read as follows:
(e) promptly upon the filing thereof, copies of all registration
statements (other than exhibits thereto, pricing supplements and any
registration statements (x) on Form S-8 or its equivalent or (y) in connection
with asset securitization transactions) and reports on Forms 10-K, 10-Q and 8-
K (or their equivalents) which the Borrower shall have filed with the
Securities and Exchange Commission;
(e) Section 5.01 (f) is amended in its entirety to read as follows:
(f) within five days after any officer of the Borrower at any time
obtains knowledge that any representation or warranty set forth in Section
4.06 would not be true if made at such time, a certificate of the chief
financial officer or the chief accounting officer of the Borrower setting
forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto; and
<PAGE>
SECTION 3. Changes in Commitments. With effect from and including the date
this Amended and Restated Credit Agreement becomes effective in accordance
with Section 5 hereof, the Commitment of each Bank shall be the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Section 2.09 of the
Agreement. Any Bank whose commitment is changed to zero shall upon such
effectiveness cease to be a Bank party to the Agreement, and all accrued fees
and other amounts payable under the Agreement for the account of such Bank
shall be due and payable on such date; provided that the provisions of Section
9.03 of the Agreement shall continue to inure to the benefit of each such
Bank.
SECTION 4. Governing Law. This Amended and Restated Credit Agreement shall
be governed by and construed in accordance with the laws of the State of New
York.
SECTION 5. Counterparts; Effectiveness. This Amended and Restated Credit
Agreement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Amended and Restated Credit Agreement shall
become effective as of the date hereof when the Agent shall have received (i)
duly executed counterparts hereof signed by the Borrower and the Banks (or, in
the case of any party as to which an executed counterpart shall not have been
received, the Agent shall have received telegraphic, telex or other written
confirmation from such party of execution of a counterpart hereof by such
party) and (ii) an opinion of the General Counsel of the Borrower (or such
other counsel for the Borrower as may be acceptable to the Agent)
substantially in the form of Exhibit E to the Agreement with reference to this
Amended and Restated Credit Agreement and the Agreement as amended and
restated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Credit Agreement to be duly executed as of the date first above written.
TOYOTA MOTOR CREDIT CORPORATION
By: /S/ George E. Borst
-------------------------------
Title: Senior Vice President
& General Manager
<PAGE>
Commitments
- -----------
$100,000,000 MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By: /S/ Robert L. Barrett
--------------------------------
Title: Vice President
$100,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /S/ Alan Roche
--------------------------------
Title: Vice President
$100,000,000 THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /S/ Tetsuji Kano
--------------------------------
Title: Deputy General Manager
$100,000,000 THE CHASE MANHATTAN BANK
By: /S/ Frances L. Bonham
--------------------------------
Title: Managing Dirextor
$100,000,000 CITIBANK, N.A.
By: /S/ Brian Ike
--------------------------------
Title: Attorney-in-Fact
$100,000,000 CREDIT SUISSE FIRST BOSTON
By: /S/ David J. Worthington
--------------------------------
Title: Managing Director
By: /S/ Mark A. Sampson
--------------------------------
Title: Vice President
<PAGE>
$40,000,000 ABN AMRO BANK, N.V., LOS ANGELES
INTERNATIONAL BRANCH
By: /S/ John A. Miller
--------------------------------
Title: Group Vice President
By: /S/ Ellen M. Coleman
--------------------------------
Title: Vice President/Director
$40,000,000 BANQUE PARIBAS
By: /S/ Lynne A. Lueders
--------------------------------
Title: Director
By: /S/ Matthew C. Bishop
--------------------------------
Title: Associate
$40,000,000 BARCLAYS BANK PLC
By: /S/ L. Peter Yetman
--------------------------------
Title: Associate Director
$40,000,000 DEUTSCHE BANK AG, NEW YORK
BRANCH / CAYMAN ISLAND BRANCH
By: /S/ Wolf A. Kluge
--------------------------------
Title: Vice President
By: /S/ Volker Recker
--------------------------------
Title: Vice President
<PAGE>
$40,000,000 THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED, LOS ANGELES AGENCY
By: /S/ Masahiro Yoshioka
--------------------------------
Title: Deputy General Manager
$40,000,000 THE SAKURA BANK, LIMITED
LOS ANGELES AGENCY
By: /S/ Daijiro Tsuchiya
--------------------------------
Title: General Manager & Agent
$40,000,000 THE SANWA BANK, LIMITED,
LOS ANGELES BRANCH
By: /S/ Nobud Katsumata
--------------------------------
Title: Assistant Vice President
$40,000,000 SWISS BANK CORPORATION,
NEW YORK BRANCH
By: /S/ Mark Crameri
--------------------------------
Title: Associate Director, Credit
Risk Managment, SBC Warburg
By: /S/ Dorothy L. McKinley
-------------------------------
Title: Associate Director,
Banking Finance Support, N.A.
$40,000,000 THE TOKAI BANK, LIMITED,
LOS ANGELES AGENCY
By: /S/ Kosuke Furukawa
--------------------------------
Title: Joint General Manager
<PAGE>
$40,000,000 UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By: /S/ Mary V. Turnbach
--------------------------------
Title: Assistant Treasurer
By: /S/ Paula Mueller
--------------------------------
Title: Vice President
- -----------------
Total Commitments
$1,000,000,000
=================
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By: /S/ Robert L. Barrett
--------------------------------
Title: Vice President
<PAGE>
Ex 10.5(g)
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 23, 1997 among
TOYOTA MOTOR CREDIT CORPORATION (the "Borrower"), the BANKS listed on the
signature pages hereof (the "Banks") and MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, as Agent (the "Agent").
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into a 364-Day Credit
Agreement dated as of September 29, 1994 and amended and restated as of
September 24, 1996 (the "Agreement");
WHEREAS, no Loans are outstanding under the Agreement at the date hereof; and
WHEREAS, the parties hereto desire to amend the Agreement as set forth herein
and to restate the Agreement in its entirety to read as set forth in the
Agreement with the amendments specified below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically defined
herein, each term used herein which is defined in the Agreement shall have the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in
the Agreement shall from and after the date hereof refer to the Agreement as
amended hereby.
SECTION 2. Amendment of the Agreement
(a) Each reference to "1995" in the definition of "Borrower's 1995 Form
10-K" and in Section 4.04(a) is changed to "1996".
(b) Each reference to "1996" in the definition of "Borrower's Latest Form
10-Q" and in Sections 4.04(b) and (c) is changed to "1997".
(c) The date "September 23, 1997" appearing in the definition of
"Termination Date" is changed to "September 22, 1998".
(d) Section 5.01(e) is amended in its entirety to read as follows:
(e) promptly upon the filing thereof, copies of all registration
statements (other than exhibits thereto, pricing supplements and any
registration statements (x) on Form S-8 or its equivalent or (y) in connection
with asset securitization transactions) and reports on Forms 10-K, 10-Q and 8-
K (or their equivalents) which the Borrower shall have filed with the
Securities and Exchange Commission;
(e) Section 5.01 (f) is amended in its entirety to read as follows:
(f) within five days after any officer of the Borrower at any time
obtains knowledge that any representation or warranty set forth in Section
4.06 would not be true if made at such time, a certificate of the chief
financial officer or the chief accounting officer of the Borrower setting
forth the details thereof and the action which the Borrower is taking or
proposes to take with respect thereto; and
<PAGE>
SECTION 3. Changes in Commitments. With effect from and including the date
this Amended and Restated Credit Agreement becomes effective in accordance
with Section 5 hereof, the Commitment of each Bank shall be the amount set
forth opposite the name of such Bank on the signature pages hereof, as such
amount may be reduced from time to time pursuant to Section 2.09 of the
Agreement. Any Bank whose commitment is changed to zero shall upon such
effectiveness cease to be a Bank party to the Agreement, and all accrued fees
and other amounts payable under the Agreement for the account of such Bank
shall be due and payable on such date; provided that the provisions of Section
9.03 of the Agreement shall continue to inure to the benefit of each such
Bank.
SECTION 4. Governing Law. This Amended and Restated Credit Agreement shall
be governed by and construed in accordance with the laws of the State of New
York.
SECTION 5. Counterparts; Effectiveness. This Amended and Restated Credit
Agreement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Amended and Restated Credit Agreement shall
become effective as of the date hereof when the Agent shall have received (i)
duly executed counterparts hereof signed by the Borrower and the Banks (or, in
the case of any party as to which an executed counterpart shall not have been
received, the Agent shall have received telegraphic, telex or other written
confirmation from such party of execution of a counterpart hereof by such
party) and (ii) an opinion of the General Counsel of the Borrower (or such
other counsel for the Borrower as may be acceptable to the Agent)
substantially in the form of Exhibit E to the Agreement with reference to this
Amended and Restated Credit Agreement and the Agreement as amended and
restated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated
Credit Agreement to be duly executed as of the date first above written.
TOYOTA MOTOR CREDIT CORPORATION
By: /S/ George E. Borst
-------------------------------
Title: Senior Vice President &
General Manager
<PAGE>
Commitments
- -----------
$100,000,000 MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By: /S/ Robert L. Barrett
--------------------------------
Title: Vice President
$100,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /S/ Alan Roche
--------------------------------
Title: Vice President
$100,000,000 THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /S/ Tetsuji Kano
--------------------------------
Title: Deputy General Manager
$100,000,000 THE CHASE MANHATTAN BANK
By: /S/ Frances L. Bonham
--------------------------------
Title: Managing Director
$100,000,000 CITIBANK, N.A.
By: /S/ Brian Ike
--------------------------------
Title: Attorney-in-Fact
$100,000,000 CREDIT SUISSE FIRST BOSTON
By: /S/ David J. Worthington
--------------------------------
Title: Managing Director
By: /S/ Mark A. Sampson
--------------------------------
Title: Vice President
<PAGE>
$40,000,000 ABN AMRO BANK, N.V., LOS ANGELES
INTERNATIONAL BRANCH
By: /S/ John A. Miller
--------------------------------
Title: Group Vice President
By: /S/ Ellen M. Coleman
--------------------------------
Title: Vice Presiden/Director
$40,000,000 BANQUE PARIBAS
By: /S/ Lynne A. Lueders
--------------------------------
Title: Director
By: /S/ Matthew C. Bishop
--------------------------------
Title: Associate
$40,000,000 BARCLAYS BANK PLC
By: /S/ L. Peter Yetman
--------------------------------
Title: Associate Director
$40,000,000 DEUTSCHE BANK AG, NEW YORK
BRANCH / CAYMAN ISLAND BRANCH
By: /S/ Wolf A. Kluge
--------------------------------
Title: Vice President
By: /S/ Volker Recker
--------------------------------
Title: Vice President
<PAGE>
$40,000,000 THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED, LOS ANGELES AGENCY
By: /S/ Masahiro Yoshioka
--------------------------------
Title: Deputy General Manager
$40,000,000 THE SAKURA BANK, LIMITED
LOS ANGELES AGENCY
By: /S/ Daijiro Tsuchiya
--------------------------------
Title: General Manager & Agent
$40,000,000 THE SANWA BANK, LIMITED,
LOS ANGELES BRANCH
By: /S/ Nobuo Katsumata
--------------------------------
Title: Assistant Vice President
$40,000,000 SWISS BANK CORPORATION,
NEW YORK BRANCH
By: /S/ Mark Crameri
--------------------------------
Title: Associate Director, Credit
Risk Management, SBC Warburg
By: /S/ Dorothy L. McKinley
--------------------------------
Title: Associate Director,
Banking Finance Support, N.A.
$40,000,000 THE TOKAI BANK, LIMITED,
LOS ANGELES AGENCY
By: /S/ Kosuke Furukawa
--------------------------------
Title: Joint General Manager
<PAGE>
$40,000,000 UNION BANK OF SWITZERLAND,
NEW YORK BRANCH
By: /S/ Mary V. Turnbach
--------------------------------
Title: Assistant Treasurer
By: /S/ Paula Mueller
--------------------------------
Title: Vice President
- -----------------
Total Commitments
$1,000,000,000
=================
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, as Agent
By: /S/ Robert L. Barrett
--------------------------------
Title: Vice President
<PAGE>
EXHIBIT 12.1
TOYOTA MOTOR CREDIT CORPORATION
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Years Ended September 30,
------------------------------------------
1997 1996 1995 1994 1993
------ ------ ------ ---- ----
(Dollars in Millions)
<S> <C> <C> <C> <C> <C>
Consolidated income
before income taxes...... $ 283 $ 260 $ 300 $293 $255
------ ------ ------ ---- ----
Fixed Charges
Interest................. 918 819 716 486 454
Portion of rent expense
representative of the
interest factor (deemed
to be one-third)....... 4 3 2 3 3
------ ------ ------ ---- ----
Total fixed charges......... 922 822 718 489 457
------ ------ ------ ---- ----
Earnings available
for fixed charges........ $1,205 $1,082 $1,018 $782 $712
====== ====== ====== ==== ====
Ratio of earnings to
fixed charges<F1>........ 1.31 1.32 1.42 1.60 1.56
==== ==== ==== ==== ====
<FN>
- -----------------
<F1> TMCC has guaranteed certain obligations of affiliates and subsidiaries
as discussed in Note 15 of the Consolidated Financial Statements. As of
September 30, 1997, TMCC has not incurred any fixed charges in connection with
such guarantees and no amount is included in any ratio of earnings to fixed
charges. The ratio of earnings to fixed charges for TMS and subsidiaries was
1.92, 1.49, 1.74, 1.90 and 2.07 for the years ended September 30, 1997, 1996,
1995, 1994 and 1993, respectively. The ratio of earnings to fixed charges for
TMMNA and subsidiaries was 65.52 for the year ended September 30, 1997.
</FN>
</TABLE>
<PAGE>
EXHIBIT 21.1
TOYOTA MOTOR CREDIT CORPORATION
LIST OF SUBSIDIARIES
State of
Subsidiary Incorporation
- ---------- -------------
Toyota Motor Insurance Services, Inc. California
Toyota Motor Insurance Agency of Ohio, Inc. Ohio
Toyota Motor Insurance Services of Kentucky, Inc. Kentucky
Toyota Motor Insurance Services of Rhode Island, Inc. Rhode Island
Toyota Motor Insurance Services of Wyoming, Inc. Wyoming
Toyota Motor Insurance Corporation of Vermont Vermont
Toyota Motor Insurance Company Iowa
Toyota Motor Life Insurance Company Iowa
Toyota Motor Credit Receivables Corporation California
Toyota Credit De Puerto Rico Corp. California
Toyota Leasing, Inc. California
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-3 (Nos. 33-52359
and 333-26717) of Toyota Motor Credit Corporation of our report dated
October 31, 1997 appearing on page 24 of this Form 10-K.
/S/ PRICE WATERHOUSE LLP
Los Angeles, California
December 22, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TOYOTA MOTOR
CREDIT CORPORATION'S SEPTEMBER 30, 1997 FINANCIAL STATEMENTS AND NOTES THERETO
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<CASH> 177
<SECURITIES> 305
<RECEIVABLES> 18,922<F1>
<ALLOWANCES> 213
<INVENTORY> 0
<CURRENT-ASSETS> 0<F2>
<PP&E> 0
<DEPRECIATION> 0<F3>
<TOTAL-ASSETS> 19,830
<CURRENT-LIABILITIES> 0<F2>
<BONDS> 14,745
0
0
<COMMON> 915
<OTHER-SE> 1,166
<TOTAL-LIABILITY-AND-EQUITY> 19,830
<SALES> 0
<TOTAL-REVENUES> 3,450
<CGS> 0
<TOTAL-COSTS> 2,708<F3>
<OTHER-EXPENSES> 323
<LOSS-PROVISION> 136
<INTEREST-EXPENSE> 0<F3>
<INCOME-PRETAX> 283
<INCOME-TAX> 121
<INCOME-CONTINUING> 162
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 162
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Receivables include Investments in Operating Leases net of Accumulated
Depreciation and Finance Receivables net of Unearned Income.
<F2>Toyota Motor Credit Corporation's Balance Sheet is not classified into
Current and Long-Term Assets and Liabilities.
<F3>Total Costs includes Interest Expense and Depreciation on Operating Leases.
</FN>
</TABLE>
