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Toyota to Honda Rating Outlooks Raised by Moody’s on Recoveries

Toyota Motor Corp. (7203) and Honda Motor Co. had their credit-rating outlook raised by Moody’s Investors Service Inc., which cited the Japanese carmakers’ recovery from natural disasters and the benefits of a weaker yen.

Moody’s upgraded its outlook for Toyota and Honda to stable from negative and affirmed their credit ratings at Aa3 and A1 respectively, according to statements by the New York-based rating company.

The change for Toyota, Japan’s highest-rated issuer, comes a month after the company doubled the amount of a bond sale, its first in eight months. Toyota sold 60 billion yen ($615 million) in a two-part offering on May 30, including three-year notes priced at 0.289 percent, according to data compiled by Bloomberg. It had originally planned to raise 30 billion yen.

Weighted average coupons on outstanding bonds sold by Toyota have fallen to 2.63 percent from 4.07 percent in the fourth quarter of 2009, according to data compiled by Bloomberg.

“Toyota has effectively recovered from production disruptions stemming from the earthquake and tsunami in 2011, and the huge level of recalls that damaged its standing in the U.S. market in 2009,” Moody’s said in the statement today. Moody’s expects Toyota to “successfully expand its sales and earnings over the next 12-24 months.”

Honda’s outlook change reflects the “substantial improvement” in its operating performance in the past year and the expectation that it will be sustained, Moody’s said in a separate statement.

-- Editors: Chua Kong Ho, Dave McCombs

To contact the reporter on this story: Anna Mukai in Tokyo at amukai1@bloomberg.net

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net

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