As implied borrowing costs continue to slide, Toyota Motor Credit is in the market with its fourth benchmark offering of the year, shopping SEC-registered, three-year notes to fund general corporate purposes, sources said. The offering is the second with a three-year tenor this year.

Bookrunners for the AA-/Aa3 offering are BNP, Citi, Deutsche Bank, and J.P. Morgan.

The company placed $1.25 billion of 1% notes due 2015 at T+67 on Feb. 14, which at the time ranked among the 15 lowest-ever coupons and reoffers at that tenor. The issue traded this morning at a yield of 0.63%, or a G-Spread of 36 bps, according to MarketAxess.

The company has improved on funding costs throughout the year. In January, the company placed $1 billion of 2.05% notes due January 2017 at T+125, or 2.09% (along with a 10-year offering). It then placed $1 billion of lower-coupon 1.75% 2017 notes in May at T+110 or 1.827%, and the issue traded last week at a lower 1.41% yield or at a G-Spread of 80 bps, trade data show.

Both Moody’s and S&P maintain negative outlooks on the ratings. Standard & Poor’s revised the outlook on six Japanese automakers to negative in April 2011, following the March 11, 2011 earthquake in Japan, which resulted in significant production cuts.

However, ratings rationale published in the first quarter by S&P cited potential overproduction in Japan. “Although we expect Toyota Motor to gradually reduce its exposure to the yen, becoming less vulnerable to a strong yen through the increase of local content in vehicles produced overseas and more imports of components for vehicles produced in Japan, large production capacity in Japan may slow the pace of recovery if the yen rises further,” analysts wrote in March.

The company is a subsidiary of Toyota Financial Services Americas Corporation, and ultimately Toyota Motor, and provides financing to authorized Toyota and Lexus dealers. – John Atkins