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Toyota Issuing Industry’s First-Ever Asset-Backed Green Bond

Toyota Financial Services (TFS) just issued the automotive industry’s first-ever Asset-Backed Green Bond in the amount of $1.75 billion, which got upsized from $1.25 billion to accommodate demand as institutional investors demonstrated strong interest in this inaugural clean transportation investment opportunity.
Toyota Badge With Green Leafs 1 photo
Photo: Toyota/edited by autoevolution
The TFS Green Bond will be used to fund new retail finance and lease contracts for Toyota and Lexus models meeting specific criteria including powertrain, fuel efficiency and emissions.

“Investors have enthusiastically welcomed the industry’s first Green Bond from Toyota Financial Services as a sign of our company’s commitment to environmentally friendly transportation,” said Mike Groff, TFS CEO. “The Green Bond itself represents the innovation that TFS brings to the financial marketplace in creating asset-backed investments that reflect the values of our company.  This, in turn, enables us to provide Toyota customers with attractive financing options for their vehicles.”

TFS is committed to use the proceeds of the Green Bond towards the purchase of retail finance and lease contracts for Toyota and Lexus vehicles meeting high green standards established by the following criteria:
  • Gas-electric hybrid or alternative fuel powertrain
  • Minimum EPA estimated MPG (or MPG equivalent for alternative fuel vehicles) of 35 city and 35 highway
  • California Low-Emission Vehicle II (LEV II) certification of super ultra-low emissions vehicles (SULEVs) or higher

So far, the models qualifying for the Green Bond include the Prius Liftback, Prius c, Prius v, Prius Plug-in, Camry Hybrid, Avalon Hybrid, RAV4 EV, Lexus CT 200h and ES 300h.
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