Toyota Financial Services issues first Euro-denominated Green Bond allocated specifically to the sales of low-emission vehicles; €600M
Toyota Financial Services (TFS) issued its first euro-denominated unsecured Green Bond today, expanding its commitment to the sale of environmentally friendly vehicles. The €600-million (US$704-million) bond will be used to fund the acquisition of new retail finance contracts and beneficial interests in lease contracts for Toyota and Lexus vehicles that meet specific clean air criteria, including powertrain, fuel efficiency and emissions. There are currently nine vehicles in the Toyota and Lexus lineup that qualify.
TFS introduced the auto industry’s first Asset-Backed Green Bond in 2014; this latest issuance is the fourth Green Bond the company has issued. Green Bonds are an important component of TFS’ diversified funding program.
The TFS Green Bond program is unique in the auto industry and enhances Toyota’s reputation for leadership in green innovation across industries.
Toyota’s environmental technology leadership and dedication to environmentally sustainable business practices is well-known. What many people may not realize is that we apply this same level of environmental consciousness when developing our funding programs. Our latest euro-denominated Green Bonds will help put even more environmentally friendly vehicles on the road.—Cindy Wang, TFS vice president of Treasury
To adapt its Green Bond program to the needs of European fixed income investors, TFS worked closely with BNP Paribas and Credit Agricole, both of which have long-standing relationships with TFS and share its commitment to green innovation. Barclays, ING and Unicredit joined BNP and Credit Agricole as the joint lead managers for the bond issuance. All partners have noted expertise in Socially Responsible Investing (SRI).
The TFS Green Bond program was reviewed by Sustainalytics, a leading global provider of environmental, social and corporate governance research, ratings and analytics.
TFS has committed to use the proceeds of the Green Bond toward the acquisition of new retail finance contracts and beneficial interests in lease contracts for new Toyota and Lexus vehicles that meet high green standards. Eligible vehicles must meet all three criteria:
Possess a gasoline-electric hybrid or alternative fuel powertrain;
Achieve a minimum of 35 highway and city miles per gallon (MPG or MPG equivalent); and
Receive a Smog Rating of 8 or better (where 10 is the cleanest), as determined by the United States Environmental Protection Agency for the purchase of a vehicle in California.
Qualifying Toyota vehicles include the Camry Hybrid, Avalon Hybrid, Prius, Prius Prime, Prius c, Prius v, and Mirai. Qualifying Lexus vehicles include the CT 200h and ES 300h.