A new type of security Toyota Motor Corp. is selling is proving a hit with Japanese drawn to the combination of limited risk and fixed dividends that beat the near-zero interest being offered on bank deposits.
Nomura Holdings Inc., the sole underwriter on the ¥500 billion share sale, cut the maximum amount of stock a single investor can buy after a flood of pre-orders, said people with knowledge of the matter. Toyota will price the Model AA shares, named after its first car, as early as Thursday.
Investors will have to hold the shares for the first five years, picking up dividends along the way, before gaining the option to sell them back to Toyota for the purchase price if the value drops. That is attractive for aging Japanese who want limited risk and returns that outstrip those on the $7.2 trillion of cash and bank deposits they have piled up.