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 medium-term debenture program (TLT07NA, TLT084A, TLT087A) at "AAA". At the same time, TRIS Rating has assigned the ratings of TLT's up to Bt10,000 million guaranteed debentures under the short-term debenture program at "T1+". The rating outlook for TLT's medium-term debentures has been affirmed at "stable".
Both the medium- and short-term issues 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% held by Toyota Motor Corporation (TMC), the ultimate parent company. All three companies, TMF, TFS and TMC are rated at "AAA" by Standard & Poor's and "Aaa" by Moody's Investors Service, with short-term issue ratings at "A-1+" and "Prime-1", respectively.
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.
TRIS Rating reported that the ratings of TLT's medium- and short-term debenture programs 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. 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. For the guarantee of both medium- and short-term debenture programs, the obligations of TMF rank at least pari passu with all other present and future unsecured, unsubordinated indebtedness of TMF. 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, TRIS Rating said that, 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. - End
Toyota Leasing (Thailand) Co., Ltd. (TLT or Issuer)
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"
Up to Bt10,000 million guaranteed debentures under short-term debenture program "T1+"
Rating Outlook: "Stable"
(Please see rating symbols and definitions below)
About Rating Symbols Assigned by TRIS Rating Co., Ltd.
Medium- and Long-term Ratings:
TRIS Rating uses eight letter rating symbols for announcing medium- and long-term credit ratings. The ratings range from "AAA", the highest rating, to "AA", "A", "BBB", "BB", "B", "C" and to "D", the lowest rating for a company or debt instrument for which payment is in default. The medium- and long-term debt instrument covers the period of time from one year up.
Each rating indicates the level of credit risk for a company or debt instrument and the capacity to pay interest and repay principal in a timely manner. The ratings from "AA" to "C" may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within a rating category.
Short-term Ratings:
The short-term ratings focus entirely on the likelihood of default and do not focus on recovery in the event of default. The symbols for short-term ratings range from "T1", the highest rating, to "T2", "T3", and to "T4", the lowest rating for a company or debt instrument with little capacity to meet the short-term obligations. Each of TRIS Rating's short-term debt instrument covers the period of not more than one year.
Each rating indicates the market position, financial fundamentals, and ability to repay short-term obligations of the company or the debt instrument. Only category "T1" may be modified by the addition of a plus (+) sign to show a higher degree of repayment ability.
All the ratings assigned by TRIS Rating are local currency ratings; they reflect the Thai issuers' ability to service their debt obligations, excluding the risk of convertibility of the Thai baht payments into foreign currencies.
Rating Outlook:
TRIS Rating also assigns a "Rating Outlook" that reflects the potential direction of a credit rating over the medium to long term. In formulating the outlook, TRIS Rating will consider the prospects for the rated company's industry, as well as business conditions that might have an impact on its fundamental creditworthiness. The rating outlook will be announced in conjunction with the credit rating. In all cases, the outlook assigned to a company will apply to all debt obligations issued by the company.
The categories for "Rating Outlook" are as follows:
Positive the rating may be raised
Stable the rating is not likely to change
Negative the rating may be lowered
Developing the rating may be raised, lowered or remain unchanged
----------------------------------------
Both the medium- and short-term issues 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% held by Toyota Motor Corporation (TMC), the ultimate parent company. All three companies, TMF, TFS and TMC are rated at "AAA" by Standard & Poor's and "Aaa" by Moody's Investors Service, with short-term issue ratings at "A-1+" and "Prime-1", respectively.
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.
TRIS Rating reported that the ratings of TLT's medium- and short-term debenture programs 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. 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. For the guarantee of both medium- and short-term debenture programs, the obligations of TMF rank at least pari passu with all other present and future unsecured, unsubordinated indebtedness of TMF. 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, TRIS Rating said that, 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. - End
Toyota Leasing (Thailand) Co., Ltd. (TLT or Issuer)
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"
Up to Bt10,000 million guaranteed debentures under short-term debenture program "T1+"
Rating Outlook: "Stable"
(Please see rating symbols and definitions below)
About Rating Symbols Assigned by TRIS Rating Co., Ltd.
Medium- and Long-term Ratings:
TRIS Rating uses eight letter rating symbols for announcing medium- and long-term credit ratings. The ratings range from "AAA", the highest rating, to "AA", "A", "BBB", "BB", "B", "C" and to "D", the lowest rating for a company or debt instrument for which payment is in default. The medium- and long-term debt instrument covers the period of time from one year up.
Each rating indicates the level of credit risk for a company or debt instrument and the capacity to pay interest and repay principal in a timely manner. The ratings from "AA" to "C" may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within a rating category.
Short-term Ratings:
The short-term ratings focus entirely on the likelihood of default and do not focus on recovery in the event of default. The symbols for short-term ratings range from "T1", the highest rating, to "T2", "T3", and to "T4", the lowest rating for a company or debt instrument with little capacity to meet the short-term obligations. Each of TRIS Rating's short-term debt instrument covers the period of not more than one year.
Each rating indicates the market position, financial fundamentals, and ability to repay short-term obligations of the company or the debt instrument. Only category "T1" may be modified by the addition of a plus (+) sign to show a higher degree of repayment ability.
All the ratings assigned by TRIS Rating are local currency ratings; they reflect the Thai issuers' ability to service their debt obligations, excluding the risk of convertibility of the Thai baht payments into foreign currencies.
Rating Outlook:
TRIS Rating also assigns a "Rating Outlook" that reflects the potential direction of a credit rating over the medium to long term. In formulating the outlook, TRIS Rating will consider the prospects for the rated company's industry, as well as business conditions that might have an impact on its fundamental creditworthiness. The rating outlook will be announced in conjunction with the credit rating. In all cases, the outlook assigned to a company will apply to all debt obligations issued by the company.
The categories for "Rating Outlook" are as follows:
Positive the rating may be raised
Stable the rating is not likely to change
Negative the rating may be lowered
Developing the rating may be raised, lowered or remain unchanged
----------------------------------------