Newly Issued Bond: Toyota Tsusho America USD Bond ; IPG : 5.5%

Toyota Tsusho America plans an A-rated 5-year USD bond at ~5.5%, refinancing Radius acquisition debt; higher leverage is offset by strong earnings and coverage.

iFAST Research Team
iFAST Research Team09 Sep 2026 16 Views
Newly Issued Bond: Toyota Tsusho America USD Bond ; IPG : 5.5%

  • Toyota Tsusho America Inc. (“TAI”), a wholly owned subsidiary of Toyota Tsusho Corporation (“Toyota Tsusho”), plans to issue a 5-year senior unsecured USD bond. Initial guidance is approximately 5.5% (U.S. 5-year Treasury yield + 95 bps). Proceeds will be used to repay the loan TAI previously drew to acquire U.S. recycler Radius Recycling, Inc.
  • The notes will be guaranteed by Toyota Tsusho. The guarantor is currently rated A by S&P, and the new issue is expected to carry the same A rating from S&P, placing it in investment grade.
  • Toyota Tsusho is the trading house of the Toyota Group. It listed on the Tokyo Stock Exchange in 1977 (ticker: 8015) and currently has a market capitalization of approximately JPY 7 trillion (same currency hereinafter). The Group’s business is organized into eight divisions: Metal+ (Plus), Circular Economy, Supply Chain, Mobility, Green Infrastructure, Digital Solutions, Lifestyle and Africa. Of these, the Africa division recorded revenue of JPY 1.93 trillion and net profit attributable to shareholders of JPY 94.0 billion in FY2026 and is the principal differentiator.
  • On operations, Toyota Tsusho’s FY2026 (year ended 31 March 2026) revenue rose 12.1% YoY to JPY 11.6 trillion and operating profit rose 9.7% YoY to JPY 545.2 billion, driven mainly by higher automotive sales and trading volumes of automobile production-related products. Net profit attributable to shareholders, however, rose only 2.2% YoY to JPY 370.5 billion, lagging operating profit, primarily because the Green Infrastructure division was dragged by a one-off loss in the Japan power-generation business, with divisional net profit falling 51% YoY to JPY 17.9 billion.
  • Momentum accelerated in 1Q FY2027. Revenue rose 37.6% YoY to JPY 3.57 trillion and net profit attributable to shareholders rose 37.5% YoY to JPY 135.3 billion. Earnings in the quarter were driven by Circular Economy and Digital Solutions: the former benefited from higher resource prices, the latter from a rebound in memory prices. Management has raised its full-year FY2027 net profit forecast by 7.5% from JPY 400 billion to JPY 430 billion.
  • As of end-March 2026, Toyota Tsusho held a cash balance of JPY 1.4 trillion, net debt of approximately JPY 944.0 billion and net gearing of about 30%. Interest coverage, measured on cash flow from operating activities, was approximately 7.2x, indicating ample debt-servicing capacity.
  • The capital structure shifted in 1Q FY2027: the Group spent JPY 663.7 billion on share buybacks, reducing the cash balance to JPY 919.7 billion and lifting net debt to JPY 1.8 trillion, with net gearing rising to about 70%. Cash flow from operating activities also turned negative at JPY 54.2 billion (1Q FY2026: JPY 34.6 billion), mainly because of JPY 151.0 billion of tax payments in the quarter. Overall, the rise in debt reflects shareholder returns rather than operating deterioration; relative to the Group’s earnings power, the debt level remains manageable.
  • Of note, Toyota Tsusho completed the acquisition of Radius in July 2025 at USD 30 per share in cash, implying an enterprise value of approximately USD 1.34 billion. Radius operates more than 100 recycling sites in North America and owns an electric-arc-furnace steel mill in the United States. Following consolidation, Circular Economy division assets increased from JPY 929.9 billion to JPY 1.4 trillion. The new issue refinances the acquisition bridge loan into 5-year fixed-rate debt — a liability-structure optimization that is credit-supportive on refinancing risk.
  • The 5-year new issue, guided at approximately 5.5%, offers a degree of attraction. Given Toyota Tsusho’s core position in the Toyota Group supply chain, its diversified divisional mix and a still-manageable debt load, we view the notes as suitable for investors seeking coupon income and a stable return. Investors should note that final pricing may not print as high as the initial guidance yield.
Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) and the analyst who produced this report hold NIL positions in the abovementioned securities. This research report was prepared with the assistance of artificial intelligence (AI) tools. iFAST Financial Pte Ltd does not rely exclusively on AI for content generation; the content of this report – including all investment theses, ratings, price targets and conclusions – has been independently reviewed and verified by the research analyst(s) to ensure accuracy and professional integrity.

All materials and contents found in this site are strictly for general circulation and informational purposes only and should not be considered as an offer, or solicitation, to deal in any of the funds or products found/identified in this site. While iFAST Financial Pte Ltd ("IFPL") has tried to provide accurate and timely information, there may be inadvertent delays, omissions, technical or factual inaccuracies and typographical errors. Any opinion or estimate contained in this report is made on a general basis and neither IFPL nor any of its servants or agents have given any consideration to nor have they or any of them made any investigation of the investment objective, financial situation or particular need of any user or reader, any specific person or group of persons. You should consider carefully if the products you are going to purchase are suitable for your investment objective, investment experience, risk tolerance and other personal circumstances. If you are uncertain about the suitability of the investment product, please seek advice from a financial adviser, before making a decision to purchase the investment product. Past performance is not indicative of future performance. The value of the investment products and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. In respect of any matters arising from, or in connection with the said research analyses or research reports, recipients of the report are to contact IFPL at 10 Collyer Quay, #26-01 Ocean Financial Centre Building, Singapore 049315, or by telephone at +65 6557 2853. Where the report contains research analyses or research reports from a foreign research house and if the recipient of such research analyses or research reports is not an accredited investor, expert investor, institutional investor or an ex-accredited investor, IFPL accepts legal responsibility for the contents of such analyses or reports to such persons only to the extent as required by law. Please note that only certain security(ies) herein are available to all investors, while the rest are only available for certain persons to invest in, such as Accredited Investors (as defined in the Securities and Futures Act) or one who invests at least S$200,000 (or its equivalent currency) per transaction. To qualify as an Accredited Investor, one needs to submit a declaration form and certain relevant supporting documents, according to iFAST’s prevailing policies and procedures.

Please read our full disclaimers on the website at ( https://fsm.global/sg/policies/328125/investment-account-terms-&-conditions).

iFAST Financial Pte Ltd (IFPL) (registered address: 10 Collyer Quay #26-01 Ocean Financial Centre Singapore 049315, Telephone: 6557 2000) holds the Financial Advisers Licence issued by the Monetary Authority of Singapore ('MAS') to conduct regulated activities of advising on securities, marketing of collective investment schemes and arranging of any contract of insurance in respect of life policies, other than a contract of reinsurance and the Capital Markets Services Licence issued by the MAS to conduct regulated activities of dealing in securities and providing custodial services for securities. While IFPL has made every effort to ensure the independence of the report's contents, IFPL's nature of business is such that IFPL and its connected and associated entities together with their respective directors, officers and staff may be involved in providing dealing or investment-related services in the abovementioned securities, and have taken or may take positions in the securities mentioned in this report, and may also act as the principal for any buy or sell trades.