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In a volatile global environment, Barclays helped Toyota Finance Australia launch a €1.75bn corporate bond offering to raise capital and provide financing options and insurance for Toyota purchasers in Australia.

The 3-tranche unsecured notes offering in April 2020 was the largest Euro-denominated issue from an Australian corporate this year. It was also the first short-dated EUR transaction following the credit market volatility driven by the outbreak of COVID-19. Both of these accomplishments were, in large part, the result of thoughtful advice and a strengthening long-term relationship between Barclays and Toyota.

Barclays has worked with Toyota for over 16 years, across divisions and key global locations in America, Japan and Europe. When Barclays re-entered the Australian market in 2018, the bank built on this relationship further, acting as Joint Lead Manager for a €1.15bn 2-tranche unsecured fixed-rate note transaction for Toyota Finance Australia in April 2019.

The global spread of the coronavirus pandemic caused a dramatic shift in market conditions in early spring 2020 raising the level of market uncertainty. However, the success of the 2019 deal gave Toyota Finance Australia the confidence to proceed with its next fixed-rate note offering, appointing Barclays as Joint Lead Manager. With close collaboration, honest feedback and sharp pricing, Barclays was also selected as preferred cross-currency-swap partner for a majority of the notes.

In uncertain times, mutual respect and trust are crucial for managing the best transaction for your client. It’s a real testament to the team that we were able to collaborate with, be challenged by, and ultimately deliver for Toyota, despite extremely challenging market conditions.
Jake Hartmann, Director, Debt Capital Markets AUS & NZ, Barclays

This deal was a truly collaborative project between Barclays and Toyota Finance Australia. Colleagues from across Barclays’ Banking, Markets and Risk teams in Sydney, Singapore and London all worked on the deal, assessing global appetite – including Toyota Finance Australia’s desire to include a 2-year tranche as part of the offering, even in volatile conditions that had prevented issuers from accessing that tenor up to that point in the crisis.

Through a considered and globally-connected approach, Barclays’ and Toyota’s strong reputations, and Toyota Finance Australia’s A1/AA- credit rating, interest in the transaction was strong, allowing an outsized 2-year tranche, which effectively re-opened the short-term market for Euro transactions.

Breaking down the Toyota Finance Australia bond
Breaking down the Toyota Finance Australia bond

The entire offering was significantly oversubscribed, and the 2-year tranche became the largest part of the deal, raising €750m, with the remaining €1bn split equally across the 4.5 and 7.5-year tranches.

We work well with Barclays because of the confidence we have in each other through clear, thoughtful and effective communication. We know we can count on Barclays to help us navigate challenging environments such as the re-opening of some European markets in April of this year. We trust that they hear our needs and aspirations, and deliver on our goals.
Carol Lydford, Treasurer, Toyota Finance Australia

As the largest car manufacturer in Australia, Toyota was particularly exposed to changes in consumer behaviour and purchasing power in the face of COVID-19. It was crucial that this offering for Toyota Finance Australia was well received by investors, and ultimately it succeeded in providing capital to the company to let purchasers get on the road.

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