Navistar Financial Corp. (NFC), an affiliate of Navistar Inc., has completed the sale of $501 million of asset-backed notes in a Rule 144-A transaction.
According to a press release, this is NFC’s first retail securitization in calendar-year 2012, continuing NFC’s initiative to reduce debt costs and build liquidity.
“We are taking advantage of current market conditions to refinance portions of our portfolio to enhance our liquidity, lower interest expense and increase our income potential,” said Bill McMenamin, vice president, treasurer and CFO for NFC.
NFC provides financing programs and services tailored to support Navistar’s dealer and customer equipment financing needs. NFC will continue to facilitate the majority of customer retail finance needs in the United States through Navistar Capital, the retail financing alliance it formed with GE Capital in 2010.
Navistar Financial said Tuesday (Nov. 10) it issued $350 million in securities that it said are eligible for a Federal Reserve program designed to spur lending to businesses.
The company, a subsidiary of heavy-vehicle maker Navistar International Corp., said it would use proceeds to provide funding for dealer inventories, according to a news release.
Navistar said the transaction is eligible for the Fed’s Term Asset-Backed Securities Loan Facility program or TALF. Under the program, investors get loans from the Fed and use the money to buy securities backed by auto loans or other assets.
Navistar Financial said it issued three-year asset-backed securities. The unit’s CEO, David Johanneson, said the company was pleased with its first foray into the public markets in several years.
“We have obtained competitively priced long-term funding and broadened our investor base, all of which will help to support our dealers’ purchase of floor plan inventory,” he said.
Also, Navistar Financial signed an agreement extending a $100 million facility used to support the purchase of fleet accounts receivable through Oct. 29, 2010.
Navistar International subsidiaries make trucks, school buses, recreational vehicles and diesel engines.