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Speeding Up Collateral Exchange: Toyota Financial Services

Debbie Kukreja, treasury operations manager; Karen Craig, managing counsel; Daniel Tschopp, treasury valuations manager; and Nishant Rohatgi, treasury business solutions manager

Last year, Toyota Financial Services (TFS) transformed its collateral-exchange procedure with 23 bank counterparties, which used to take five days at the end of the month, to meet a new two-hour daily processing requirement. The effort took seven months, five months less than expected, and an investment of only $100,000, which was 50% under budget.

With these changes, TFS, a wholly owned subsidiary of Toyota Motor, eliminated $1 billion in unsecured counterparty risk exposure and saved more than $100 million via lower funding costs, while also avoiding the use of credit default swaps and decreasing its credit value adjustments.

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