Toyota Financial Services (TFS) built an automated platform to manage debt compliance requirements, which grew increasingly complex following the financial crisis and the company's loss of its triple-A rating.
"With a triple-A, we relied on unsecured debt to meet most of our funding needs, and we had only six related documents for compliance purposes," says Paul Boodee, director of the Americas region at TFS. "It was a much simpler time."
The liquidity crunch during the financial crisis and the company's downgrade to AA-minus prompted TFS to diversify its funding further. It now faces compliance requirements for 80 transaction documents with more than 5,500 clauses. They include covenants that, if breached, could result in a technical default, the need to restate financials and reputation risk that could impact future financings.
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