Navistar to Offer Senior Notes - Analyst Blog


Navistar International Corporation ( NAV ) announced its intention to offer $300 million of 8.25% worth of senior notes scheduled to mature in 2021, depending on market conditions.

These senior notes will be issued as additional notes under the previous issue of $1 billion of 8.25% senior notes due in 2021. Thus, it will contain the same terms as the existing senior notes. Out of $1 billion senior notes, $900 million is outstanding.

Recently, Navistar announced the amendment of its $1 billion senior secured term loan facility. Under the amendment, maturity date was extended from Jul 16, 2014 to Aug 17, 2017 and it is expected to include an interest rate repricing.

The proceeds from the issuance of senior notes will be used to repay a portion of the senior secured term loan facility. This is with respect to the amendment of the facility. J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, BofA Merrill Lynch and Goldman, Sachs & Co. will act as the joint book-running managers for the offering.

Navistar recorded narrower loss of $114.0 million or $1.42 per share in the first quarter of fiscal 2013 ended Jan 31, 2013 compared with $144.0 million or $2.06 per share in the year-ago quarter. The loss per share was also better than the Zacks Consensus Estimate of a loss of $1.63 per share.

Revenues declined 12.4% year over year to $2.6 billion in the quarter, missing the Zacks Consensus Estimate of $2.8 billion. The year-over-year decline in revenues was due to sluggish industry demand and lower market share of the company due to its transition to clean engine systems as per EPA regulation.

Warrenville, Ill-based Navistar International manufactures and sells commercial trucks, mid-range diesel engines, buses, military vehicles and chassis for motor homes and step-vans. Navistar also provides service parts for various trucks and trailers.

Currently, Navistar retains a Zacks Rank #3 (Hold) on its stock. Meanwhile, some other stocks that are performing well in the industry where Navistar operates include Gentherm Incorporated ( THRM ), Visteon Corp. ( VC ) and Denso Corp. ( DNZOY ). All these companies carry a Zacks Rank #1 (Strong Buy).

DENSO CORP (DNZOY): Get Free Report

NAVISTAR INTL (NAV): Free Stock Analysis Report

GENTHERM INC (THRM): Free Stock Analysis Report

VISTEON CORP (VC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: DNZOY , NAV , THRM , USA , VC

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