(The following was released by the rating agency)
TOKYO (Standard & Poor‘s) April 17, 2012--Standard & Poor’s Ratings Services today assigned its ‘AA-’ debt ratings to Japan-based Toyota Finance Corp.’s (TFC; AA-/Negative/A-1+) JPY10 billion, 0.272%, series 48 domestic senior unsecured bonds due June 19, 2015, and its JPY15 billion, 0.415%, series 49 domestic senior unsecured bonds due June 20, 2017.
TFC is a wholly owned subsidiary of Toyota Financial Services Corp. (TFS; AA-/Negative/A-1+). TFS, in turn, is a wholly owned subsidiary of Toyota Motor Corp. (AA-/Negative/A-1+) and oversees the management of Toyota Motor’s financial subsidiaries, including TFC. TFC provides a broad range of finance products to customers in Japan.
Given TFC’s essential marketing role in Japan as Toyota group’s captive finance company, the ratings on the company reflect Toyota Motor’s credit strength. Accordingly, its ultimate parent, Toyota Motor, has a very strong economic incentive to maintain the company’s financial soundness and competitiveness, in our view, as is reflected in credit support agreements between Toyota Motor and TFS and between TFS and TFC.
The ratings on Toyota Motor reflect its strong competitive position, extensive geographic and product diversity, minimal financial risk profile, technological leadership, and close relationships with highly competitive and financially strong Toyota group suppliers. The potential for overproduction in Japan and a persistently strong yen to prevent continuing improvement in Toyota Motor’s profitability partially offsets these strengths. The ratings also reflect intense competition in the global auto industry.
General Criteria: Principles Of Credit Ratings, Feb. 16, 2011 2008 Corporate Criteria: Analytical Methodology, April 15, 2008