Toyota offers $2.3 billion of debt in first deal since '09

, Bloomberg



Toyota Motor Corp., the world's biggest carmaker, is raising $2.3 billion with its first bond sale in the currency since 2009.

The company is offering securities due August 2017 and February 2023, according to a person with knowledge of the sale. Yields on auto debt dropped 21 basis points since the start of December to 68 basis points more than the swaps rate, according to Bank of America Merrill Lynch's Euro Auto Group index. They touched an 18-month low of 67 on Jan. 14.

Toyota auto sales slumped 21 percent in Europe last month, compared with a 16 percent drop for global carmakers in the region. That hasn't curbed demand for carmaker debt, with relative yields on Bayerische Motoren Werke's 2016 bonds tightening seven basis points to 31 basis points since pricing on Jan. 13, Bloomberg generic prices show.

"While the auto industry is so-so at the moment, with hope for improvements in the second-half of 2013 Toyota is a stable name," said Elmar Zurek, a fund manager at DWS Investment in Frankfurt.

Toyota last issued bonds in the currency in February 2009, when it sold $1.67 billion of seven-year securities, according to data compiled by Bloomberg. The company is marketing 1 billion euros of 4½-year bonds with a spread of 40 basis points more than swaps and $996 million of 10-year securities at 70 basis points.

Jaguar Land Rover

Jaguar Land Rover is also tapping credit markets Wednesday, offering its first dollar-denominated bond since May 2011, according to data compiled by Bloomberg. The Warwickshire, U.K.-based company plans to sell $400 million of 10-year bonds callable after five years.

Among other companies issuing debt Wednesday, Eurofin Scientific is marketing as much as $200 million of subordinated perpetual bonds at 7 percent to 7.25 percent. It's the Luxembourg-based company's first sale since June 2010, data compiled by Bloomberg show.

UniCredit Bank Austria will sell five-year senior unsecured notes at 163 basis points more than swaps.

The Markit iTraxx Crossover Index of credit-default swaps on 50 companies with mostly high-yield ratings rose one basis point to 424.

The Markit iTraxx Financial Index of contracts on the senior debt of banks and insurers increased two basis points to 137.

A basis point on a credit-default swap contract protecting 10 million euros of debt from default for five years is equivalent to 1,000 euros a year. Swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.

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