TRIS Rating Co., Ltd. has affirmed the ratings of Toyota Leasing (Thailand) Co., Ltd.'s (TLT or Issuer) Bt8,000 million guaranteed debentures under the Bt30,000 million medium-term debenture program at "AAA". The debentures are guaranteed by Toyota Motor Finance (Netherlands) B.V., (TMF or Guarantor). TMF is a wholly-owned subsidiary of Toyota Financial Service Corporation (TFS), which is 100% owned by Toyota Motor Corporation (TMC), the ultimate parent company. All three companies, TMF, TFS and TMC are rated on par at "AAA" by Standard & Poor's (S&P) and "Aaa" by Moody's Investors Service.
TRIS Rating reported that the ratings of TLT's debentures reflect the unconditional and irrevocable guarantee by TMF, whose rating is based on the credit strength of TMC. Under this guarantee structure, TMC has provided a Credit Support Agreement (CSA) to TFS, which, in turn, provided a CSA to TMF (see diagram on page 2). Under the terms of the CSA, TMC will provide sufficient liquidity for bond or debenture and commercial paper obligations of both subsidiaries, TFS and TMF. TMC will also provide sufficient liquidity for TMF's guarantee obligations. The guarantee made by TMF is governed by the Dutch law and is unconditional and irrevocable. It provides for punctual payment to the debenture holders of all sums payable by TLT. The obligations of TMF under this guarantee rank at least pari passu with all other present and future unsecured and unsubordinated indebtedness of TMF. Therefore, this guarantee ensures that the credit risk of the debentures is the same as the credit risk of the senior unsecured debt of the Guarantor. The guarantee cannot be amended or terminated without the consent of both the debenture holders' representative and the Guarantor, and the consent of the debenture holders' representative is contingent upon a majority vote of the debenture holders.
However, the Guarantor will not be under any obligation to make payment for the Issuer's failure to pay as a result of any of the following actions by any Thai government agency: (1) interruption of payment by causing Issuer to be unable to transfer monies or to convert foreign currency to the Registrar or debenture holders to pay debt obligations; (2) causing the transfer of majority shareholding in, or control over, the Issuer to a third-party not associated with the Toyota group; (3) expropriation or nationalization of at least 10% of the net value of hire-purchase receivables of the Issuer and its subsidiaries; (4) expropriation or nationalization that has the effect of preventing the Issuer and its subsidiaries from carrying on business. TRIS Rating believes that the above events are highly unlikely to occur.
TRIS Rating said that the "stable" outlook reflects the creditworthiness of TLT's ultimate parent, TMC. TMC's ability to maintain its strong position in major markets has been supported by its extensive geographic and product diversification. In addition, the efficient production capability of the group allows TMC to consistently generate favourable financial performance despite the cyclical nature of demand and the intensely competitive environment in the automotive industry. TMC's extremely strong financial profile is also critical to support its credit profile. The outlook also takes into consideration the expectation that TMC will be able to sustain its excellent market position and solid financial profile.- End
Toyota Leasing (Thailand) Co., Ltd. Issue Ratings: Bt30,000 million guaranteed debentures under medium-term debenture program - TLT07NA: Bt3,000 million guaranteed debentures due 2007 Affirmed at AAA - TLT084A: Bt3,000 million guaranteed debentures due 2008 Affirmed at AAA - TLT087A: Bt2,000 million guaranteed debentures due 2008 Affirmed at AAA Rating Outlook: Stable