Toyota Motor Credit Corp. is preparing to issue investment notes with an embedded option on a basket of three base metals. The U.S. financing arm of the corporate has been expanding its methods for raising funds in the last few months and in September offered its first commodity-linked notes. The note is being structured for Toyota by Citigroup.
According to a preliminary prospectus filed with the Securities and Exchange Commission the note references an equally-weighted basket made up of aluminum, copper and zinc. At maturity in 2010, the investor's principal will be returned, along with 125% of the growth in the basket. There will be a maximum return expected to be between 60-65% of principal and a minimum return of 3% of principal. The final details will be set when the notes price.
Steve Howard, director of capital markets in Torrance, Calif., said a pricing date has not yet been fixed. Base metals is one of a range of underlyings the corporate has been considering. "We are eager to try new things and are eager to give the market what they want," said Howard. Toyota is expecting to increase its funding via structured notes this year and will look to expand its roster of offerings.
The base metal notes will be distributed via Citigroup's broker-dealer network. Citi officials did not comment by press time.
