(The following statement was released by the ratings agency)
LONDON, Sept 22 - Moody's Investors Service assigned ratings of Aaa to the senior Class A-2, Class A-3, and Class A-4 notes issued by Toyota Auto Receivables 2003-B Owner Trust.
The unrated Class A-1 senior note was retained. The transaction is Toyota's fifteenth securitization backed by retail automobile loans originated through its dealer network. The complete rating action is as follows: Issuer: Toyota Auto Receivables 2003-B Owner Trust $479,000,000 1.43% Class A-2 Asset Backed Notes, rated Aaa $554,000,000 1 mo LIBOR + 0.03% Class A-3 Floating Rate Asset Backed Notes, rated Aaa $238,000,000 2.79% Class A-4 Asset Backed Notes, rated Aaa Moody's said the Aaa ratings are based on the superior quality of the underlying auto loan receivables, the 3.00% subordinate certificate, the 0.50% of original principal balance revolving liquidity note, and the excess spread available. The ratings are also based on the transaction's structure and the experience of Toyota Motor Credit Corporation (TMCC) as servicer. The floating rate Class A-3 notes are backed by swap agreements with TMCC. In the event that the long-term or short-term debt rating of TMCC is reduced to a level below Aa3 or P-1, respectively, by Moody's, TMCC has the option but no obligation to assign the swap agreements to another party or post collateral. As a result, the ratings on the notes will be subject to greater rating's volatility due to their reliance on the performance of TMCC.
Additionally, in the event of a swap termination, any payments due to the swap counterparty from the trust will have priority over payments to the noteholders. Marc Cohen, a Vice President in Moody's Structured Finance Group, noted that the rate of losses and delinquencies of TMCC's portfolio have somewhat stabilized in recent months and compare favorably with that of the industry. TMCC's prior retail loan securitizations have had loss performance around or below 1%. That favorable performance is a reflection of TMCC's strong auto loan operations, highly seasoned pools and generally strong resale performance of Toyota vehicles which bolsters recoveries on repossessed vehicles. TMCC, located in Torrance, California. On October 1, 2000, Toyota Financial Services Corporation assumed ownership of TMCC, which previously had been a subsidiary of Toyota Motor Sales, U.S.A., Inc. TMCC offers wholesale, retail, and lease financing of Toyota and Lexus vehicles throughout the United States. As of June 30, 2003, TMCC's serviced retail automobile loan portfolio was $23.0 billion. Moody's rates TMCC's long term, unsecured obligations Aaa and its commercial paper Prime-1.