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S&P Assigns 'AAA' Rating to Toyota Yen 50 Billion Issue

2 September 1998

S&P Assigns 'AAA' Rating to Toyota Yen 50 Billion Issue

    TOKYO, Sept. 2 -- Standard & Poor's today assigned its
triple-'A' ratings to Toyota Motor Corp.'s Y50 billion 2.07% domestic straight
bonds due Sept. 20, 2010.
    The rating is based on Toyota's ability to maintain an exceptionally
strong financial profile amid an increasingly 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, very high
productivity, and low debt usage.
    Toyota is expected to maintain a strong financial profile despite the
current downturn in Japan's automobile market, although profitability over the
near term will remain below the peak level of fiscal 1997 (ended March 1998).
Toyota's ability to weather market adversities is supported by the company's
strong sales network, its rigorous cost-reduction efforts, and its improving
sales performance in major overseas markets.  The company also benefits from
the yen's current weakness.
    Toyota's debt usage is very low.  The ratio of total debt to capital,
after adjusting for debt held by finance subsidiaries, is below 10%.
Moreover, Toyota has excellent financial flexibility, in the form of more than
Y1.7 trillion (about US$12 billion) in cash and short-term marketable
securities as of March 1998.
    Toyota's recently announced plan to assume majority ownership of
affiliate automaker Daihatsu Motor Co. Ltd., and the potential increase in
Toyota's investments in financial institutions in Japan, are not expected to
have a material impact on the financial profile.  Still, there could be cause
for concern if Toyota takes further actions to assist financial institutions.
    OUTLOOK: STABLE
    Toyota is expected to maintain its exceptional financial profile under the
difficult operating environment, backed by its outstanding market position,
improved cost structure, and very conservative financial profile,
Standard & Poor's said. -- CreditWire