Car-Maker Notes Attract Investors Seeking Short-Term Yield
Among the hottest offerings from some car makers lately: relatively chunky yields.
Investors are flocking to Toyota seeking something other than a sleek ride. Short-term notes from Toyota Motor Credit Corp., a financing arm of the Japanese car manufacturer, have paid monthly coupons at an annual rate of 2% for much of this year.
投资者纷纷涌向丰田，寻求的不是一辆时髦的车。丰田汽车信贷公司(Toyota Motor Credit Corp.)旗下的融资部门丰田汽车信贷公司(Toyota Motor Credit Corp.)发行的短期票据今年大部分时间的月息为2%。
Purchases of these “Toyota Income Driver Notes” nearly tripled from March to September, the company says. The number of accounts managed by financial advisers has also grown, suggesting professionals are considering them for their clients as well.
该公司表示，从3月到9月，这些“丰田收入驱动票据”(Toyota Income Driver Notes)的购买量几乎增加了两倍。由财务顾问管理的账户数量也在增加，这表明专业人士也在考虑为他们的客户管理账户。
Called “variable denomination floating rate demand notes,” the securities are basically unsecured bonds, paid by the company’s cash from operations. There is no public market and investors can typically withdraw their money at will. Rates can be changed at any time by the company, which can call the securities at its discretion.
Toyota isn’t the only auto maker borrowing directly from individual investors. Mercedes-Benz, Ford and General Motors ’ units all offer similar programs, with different restrictions, which they say helps diversify their financing base. Others companies that have tapped the market include Ally Financial Inc. and heavy-equipment maker Caterpillar Inc.
丰田并不是唯一一家直接向个人投资者借款的汽车制造商。梅赛德斯-奔驰(Mercedes-Benz)、福特(Ford)和通用汽车(General Motors)的子公司都提供类似的计划，但有不同的限制，他们说这有助于分散他们的融资基础。其他利用这一市场的公司包括艾丽金融公司(Ally Financial Inc.)。重型设备制造商卡特彼勒公司(Caterpillar Inc.)。
Behind investors’ enthusiasm: The yields on auto makers’ securities far outstrip those offered by other relatively low-risk investments. The Federal Reserve cut short-term interest rates to near zero to fight the pandemic’s economic damage, while buyingbillions of dollars worth of Treasurys to help keep U.S. borrowing costs low.
That brought down yields on investment products tied to U.S. interest rates, such as government bonds, certificates of deposits and money-market funds. As of Nov. 11, the average one-year certificate deposit rate was 0.24%, according to Bankrate, while money-market account rates averaged 0.1%.
“That 2% rate is comparatively looking like a pretty good deal right now,” says Brendan Crews, investment adviser at Daviman Financial, which deals mostly with middle-class investors. The Indianapolis firm has discussed Toyota’s securities with clients more this year than any time in the past, but hasn’t bought any.
戴维曼金融公司(Daviman Financial)的投资顾问布伦丹·克鲁斯(Brendan Crews)说：“2%的利率目前看起来相当不错。”该公司主要与中产阶级投资者打交道。这家印第安纳波利斯公司今年与客户讨论丰田证券的次数比以往任何时候都多，但没有购买任何证券。
“These notes work better for investors looking to safely accumulate or protect wealth, rather than those selling investments to fund their retirement,” adds Mr. Crews. “There are different instruments available to create actual income for someone.”
The notes carry more risk than something like certificates of deposit or money-market mutual funds. CDs are protected by the Federal Deposit Insurance Corp. up to $250,000, while money-market funds, due to federal regulations, tend to hold a diverse mix of short-term debt. Toyota’s notes are unsecured, meaning investors will have to wait in line behind other creditors if the company ends up struggling to pay the interest or principal.
Toyota Motor Credit Corp. has a credit rating of A1 from Moody’s Investors Service, the fifth-highest on the investment-grade scale.
丰田汽车信贷公司(Toyota Motor Credit Corp.)在穆迪投资者服务公司(Moody‘s Investors Service)的信用评级为A1，在投资级评级中排名第五。
Investors must buy at least $500 in Toyota’s notes and maintain at least half that much in the account, though the company says they can withdraw money at any time and expect to receive it within one to two days.
The low minimum and relatively high yield makes Toyota’s short-term, floating rate note more attractive than some of its competitors. Ford Motor Credit Co. LLC, the Ba2 rated financing arm of the Detroit automotive giant, offers a similar program on a tiered basis. Investors in the first-tier put down anywhere from $1,000 up to $15,000 to earn a 0.8% annual yield.
较低的最低利率和相对较高的收益率使丰田的短期浮动利率票据比一些竞争对手更具吸引力。底特律汽车巨头福特汽车信贷有限公司(Ford Motor Credit Co.LLC)是这家底特律汽车巨头的Ba2级融资部门，它在分级的基础上提供了类似的计划。第一梯队的投资者投入了1,000美元至15,000美元不等的资金，以赚取0.8%的年收益率。
Mercedes-Benz Financial Services USA, a finance division of the German luxury car brand under Daimler AG , offers privately placed, variable-rate demand notes to accredited investors. Investors must put down a minimum of $10,000 for an annual yield of 1.5%. Funds are available as needed on demand, within a few days.
梅赛德斯-奔驰金融服务美国公司(Mercedes-Benz Financial Services USA)是戴姆勒股份公司(Daimler AG)旗下德国豪华汽车品牌的金融部门，向认可投资者提供私下配售的可变利率缴费票据。投资者必须支付最低1万美元才能获得1.5%的年收益率。根据需要，资金可以在几天内到位。
These notes previously offered companies access to cheaper sources of funding. But following the Fed’s unprecedented decision to purchase corporate bonds to prop up markets and the economy, borrowing costs for highly rated companies like Toyota have fallen to record lows, while prices of existing bonds trade above 100 cents on the dollar.
Earlier this week, Toyota said the company would cut the annual rate on its notes to 1.5%. Ally Financial Inc. announced in a Securities and Exchange Commission filing Monday that the company intends to terminate its adjustable-rate demand note program and redeem the $2.5 billion amount held by outside investors by late February 2021.
本周早些时候，丰田汽车表示，将把债券年利率降至1.5%。Ally Financial Inc.。在周一提交给美国证券交易委员会(Securities And Exchange Commission)的一份文件中宣布，该公司打算在2021年2月底之前终止可调整利率的缴费票据计划，并赎回外部投资者持有的25亿美元。
In October, Toyota issued a $1.2 billion bond due October 2022 that pays a coupon of 0.35%. The bond last traded at 100.103 cents on the dollar, according to Bondticker, implying a yield of 0.296% at maturity—well below the rate offered on the company’s floating-rate demand notes.
That can make the retail securities attractive to investors, since low-interest rates in the public markets imply investor confidence that the company will pay back its debts in full.
Financial advisers, however, often advise clients against tying up their money in one company. Those who rely on fixed-income payments as a form of income, such as retirees, should particularly avoid such concentration, says Larry Swedroe, chief research officer at Buckingham Strategic Wealth.
然而，财务顾问经常建议客户不要将资金捆绑在一家公司。白金汉战略财富(Buckingham Strategic Wealth)首席研究官拉里·斯威德罗(Larry Swedroe)表示，那些依赖固定收益支付作为一种收入形式的人，如退休人员，尤其应该避免这种集中。
“I would want to buy a huge portfolio of hundreds of these so I wouldn’t have the idiosyncratic risk of Toyota,” he said. “The average investor buying this stuff is not going to be able to analyze the risk in each of these floating rate notes.”