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A Toyota Motor Corportion financial services unit has applied for about US$2 billion in loans backed by the Japanese government, as the financial crisis threatens funding at the world’s top carmaker, according to a report on Japanese state TV broadcaster NHK.

Reuters newsagency carried the report, saying that with credit markets worldwide in turmoil, Toyota may be the first of a string of Japanese companies with high credit ratings to turn to state-backed loans prior to the closing of books for the Japanese business year at the end of March.

Credit default swaps on car makers in Asia and Europe are at steep discounts as investors worry about liquidity and short-term debt maturities at carmakers’ financial services operations.

The financial ratings service, Moody’s, implied ratings for Toyota and American Honda Finance Corp, based on credit default swaps, are both many notches lower than the agency’s actual ratings for the two companies.

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Wholly owned car-loan financing firm Toyota Financial Services has asked the state-backed Japan Bank for International Cooperation for a 200 billion yen (US$2.1 billion) loan to help cover rising credit costs in the United States, NHK said without citing sources.

Toyota spokesmen said they were checking on the report.

Carmakers worldwide are reeling from a collapse in consumer demand since last year that has forced them to cut production and shed jobs.

Finance company GMAC, the main lender to struggling automaker General Motors Corporation has been hit by losses in its vehicle and mortgage units, but won a US$6 billion government bailout in December and the right to tap lower-cost funding.

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Toyota faces an operating loss of 450 billion yen (about US$4.5-billion) for the year to March, as sales tumble in its biggest markets of Japan, North America and Europe.

Toyota Financial Services, with assets totalling 14.3 trillion yen (US$147 billion) as of the end of September, provides car leases around the world and home loans and asset management services in Japan.






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