Toyota Sells $20 Million of Structured Notes in First 2012 Deal

Toyota Motor Corp. sold $20 million of structured notes in its first U.S. offering this year.

Toyota Motor Credit Corp., the finance unit of Asia’s biggest automaker, issued $10 million in so-called step-up, callable notes on April 18 and added another $10 million later, according to a prospectus filed April 27 with the Securities and Exchange Commission. Barclays Plc distributed the three-year securities, which yield a set interest rate that increases, or steps up, at predetermined dates, for a 0.22 percent fee.

Issuing structured notes lets Toyota “tap into a different kind of demand and potentially different kinds of investors,” Steve Howard, who runs the company’s capital markets and derivatives programs in Torrance, California, said last October in a phone interview. The debt is often bought by individuals.

The carmaker sold $100 million of similar step-up notes last year. Before credit markets seized up in the second half of 2008, Toyota issued structured notes tied to equities, commodities and interest rates, with the securities making up as much as 10 percent of overall funding, Howard said.

Structured notes are securities that combine bonds with derivatives, which are contracts whose value is derived from stocks, bonds, currencies and commodities.

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