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Standard & Poor's Assigns 'AAA' Ratings to Toyota Yen Issues

4 February 1998

Standard & Poor's Assigns 'AAA' Ratings to Toyota Yen Issues

    TOKYO, Feb. 4 -- Standard & Poor's today assigned its
triple-'A' ratings to Toyota Motor Corp.'s Y150 billion 2.35% domestic
straight bond due February 19, 2008 and to the company's Y50 billion 3%
domestic straight bond due February 19, 2018.
    The ratings are based on Toyota's ability to maintain an exceptionally
strong financial profile amid an increasing challenging industry environment.
One of the world's leading automakers, Toyota benefits from its dominant share
of the Japanese automobile market, a solid presence in the global automotive
industry, superior product engineering, and very high productivity.
    Toyota has been able to maintain strong earnings performance despite the
current downturn in Japan's economy and in the nation's automobile market.
This is mainly a factor of the company's extensive domestic sales network, its
rigorous cost-reduction efforts, and its improving sales performance in major
overseas markets, in addition to the beneficial effects of the yen's
depreciation in recent months.  Consolidated operating income for fiscal 1997
(ending March 1998) is projected to exceed the peak level of Y665 billion
recorded in fiscal 1996.  Debt leverage remains very low.  Moreover, Toyota
has exceptional financial flexibility, in the form of more than Y1.85 trillion
(about US$14 billion) in cash and short-term marketable securities.  These
resources provide an ample cushion with which Toyota can weather market
adversities.

    OUTLOOK: STABLE
    The outlook on the company's credit rating is stable.  Despite intensely
competitive industry conditions, Toyota has successfully preserved high
profitability.  Rigorous cost-cutting efforts have been key to this
achievement.  Toyota is expected to maintain its exceptionally strong
financial profile over the next few years.

SOURCE  Standard & Poor's CreditWire