Toyota completes US$1.9bn auto receivables securitisation

Toyota Motor Credit Corporation has completed a US$1.9bn securitisation backed by US motor vehicle retail instalment receivables, providing another capital-markets funding channel for its consumer finance portfolio.

Toyota Auto Receivables 2026-C Owner Trust issued six classes of asset-backed notes on 21 July. The structure comprises US$440m of Class A-1 notes, US$528m of fixed-rate Class A-2a notes, US$131m of floating-rate Class A-2b notes, US$659m of Class A-3 notes, US$94.5m of Class A-4 notes and US$47.5m of Class B notes.

Around US$1.76bn of the Class A securities was offered through underwriters. MUFG Securities, Barclays, BMO Capital Markets, Lloyds Securities and TD Securities acted as joint global coordinators, bookrunners and representatives of the underwriting group.

Under the transaction, Toyota Motor Credit transferred a pool of motor vehicle retail instalment contracts to Toyota Auto Finance Receivables, which in turn transferred the receivables to the issuing trust. Payments collected from borrowers will service the notes under the transaction’s priority of payments.

The deal illustrates how receivables securitisation allows a finance company to convert a diversified portfolio of contractual payments into marketable securities. By moving eligible assets into a bankruptcy-remote trust, the issuer can access investors whose risk is linked principally to the performance and structural protection of the receivables pool.

The Class A notes were expected to carry AAA ratings from S&P Global Ratings and Fitch Ratings. Pricing ranged from 3.913% on the short-dated Class A-1 tranche to 4.61% on the Class A-4 notes, while the Class A-2b tranche pays the secured overnight financing rate plus 0.31 percentage points.

Although auto loan securitisation sits outside conventional trade receivables finance, it remains an important part of the wider receivables funding market. The transaction demonstrates the depth of US asset-backed securities demand and the ability of established originators to raise large volumes against granular payment assets.

For lenders and specialist finance providers, the broader relevance lies in the disciplines required to access institutional capital: consistent origination data, servicing performance, asset eligibility controls and transparent reporting. Those requirements are increasingly shaping funding strategies across other receivables classes.