UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of Report (Date of earliest event reported): February 3,
2006
NAVISTAR
INTERNATIONAL CORPORATION
(Exact
name of registrant as specified in its charter)
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Delaware
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1-9618
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36-3359573
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(State
or other jurisdiction of
incorporation
or organization)
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(Commission
File No.)
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(I.R.S.
Employer
Identification
No.)
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4201
Winfield Road, P.O. Box 1488, Warrenville, Illinois
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60555
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code (630) 753-5000
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[_]
Written communications pursuant to Rule 425 under the Securities
Act
[_]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[_]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
[_]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
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2
ITEM
1.01 ENTRY
INTO A MATERIAL DEFINITIVE AGREEMENT
On
February 9, 2006, Navistar International Corporation (the company) announced
that is has entered into a commitment letter dated February 9, 2006 (the
"Commitment Letter"), with Credit Suisse and Credit Suisse Securities
(USA) LLC
(“Credit Suisse”), J.P. Morgan Chase Bank, and J.P. Morgan Securities Inc.
(“JPMorgan”), Banc of America Securities LLC and Banc of America Bridge LLC
(“BofA”) and Citigroup Global Markets Inc. and Citigroup North America, Inc.
(“Citigroup”, together with Credit Suisse, JPMorgan and BofA, the “Lenders”)
under which the Lenders have committed,
subject
to the terms and conditions set forth in the Commitment Letter,
to provide the Company with a 3-year senior unsecured term loan facility
in the
aggregate principal amount of $1,500,000,000 (the "Loan
Facility"). The Loan Facility will be guaranteed by International Truck
and
Engine Corporation, the principal operating subsidiary of the Company.
The
commitment to fund the Loan Facility will expire August 7,
2006. If
the
commitment is terminated or expires, or if
and to
the extent the Loan Facility is funded, the Company will have to pay
certain
fees, the total of which the Company does not believe would be material
to its
financial position or results of operations.
The
Loan
Facility will accrue interest at a rate equal to an adjusted LIBOR rate
plus a
spread. The spread, which will be based on the company’s credit ratings in
effect from time to time, may range from 450 basis points to 700 basis
points
and will increase by an additional 50 basis points at the end of the
twelve-month period following the date of the first borrowing and by
an
additional 25 basis points at the end of each subsequent six-month
period.
The
proceeds of the Loan Facility may be used to refinance the Company's
9.375%
Senior Notes due 2006, 6.25% Senior Notes due 2012, 7.5% Senior Notes
due 2011,
2.5% Convertible Notes due 2007 and its 4.75% Subordinated Exchangeable
Notes
due 2009 (collectively, the "Existing Notes"). The
commitment by the Lenders to provide the Loan Facility is subject to,
among
other things, execution of a definitive loan agreement and other loan
documentation and opinions of counsel acceptable to Credit Suisse and
its
counsel, the provision of certain monthly, quarterly and annual financial
reporting information in respect of the company and its consolidated
subsidiaries in a form acceptable to Credit Suisse, receipt of requisite
governmental and third party approvals and the satisfaction of other
customary
conditions precedent for financings of this type.
ITEM
8.01 OTHER
EVENTS
On
February 3, 2006, the company received notices from BNY Midwest Trust Company,
as trustee (the “Trustee”) under the applicable indentures for each of the
following series of the company’s outstanding long-term debt: (1) 2.5% Senior
Convertible Notes due 2007; (2) 9.375% Senior Notes due 2006; (3) 6.25%
Senior
Notes due 2012; and (4) 7.5% Senior Notes due 2011. Each such notice alleges
that the company is in default of a financial reporting covenant under
the
applicable indenture governing such notes for failing to furnish the Trustee
a
copy of the company’s Annual Report on Form 10-K for the fiscal year ended
October 31, 2005. The company disputes the allegation of default contained
in
those notice letters. As previously
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3
disclosed
in the company’s Current Report on Form 8-K filed with the SEC on January 17,
2006, the company was unable to timely file its Annual Report on Form 10-K
for
the period ended October 31, 2005 because it is still in discussions with
its
outside auditors about a number of complex and technical accounting items.
The
company intends to file its Annual Report on Form 10-K for the fiscal year
ended
October 31, 2005 with the SEC as soon as practical. At that time, the company
intends to furnish the Trustee with a copy of the company’s Annual Report on
Form 10-K for the fiscal year ended October 31, 2005 as required under
the
indenture governing the above described notes.
In
the
event the Trustee (or the holders of such notes for a series) is successful
in
asserting a default under the applicable indenture, the indenture for the
2.5%
Senior Convertible Notes due 2007 provide that the company has 60 days
from the
date notice of default is given to cure such default, and the indentures
for the
9.375% Senior Notes due 2006; the 6.25% Senior Notes due 2012; and the
7.5%
Senior Notes due 2011 provide that the company has 30 days from the date
notice
of default is given to cure such default. Assuming the validity of the
notices,
if the company does not cure the default within the prescribed time period,
then
an event of default would occur under the notes giving either the Trustee
or 25%
or more of the holders of each series of notes the right to declare the
principal amount and all accrued interest under such notes due and payable,
unless a waiver is obtained from holders of 51% or more of the aggregate
principal indebtedness under such series of notes. If the maturity of
any series of the outstanding notes were accelerated after the cure period
had
expired, such acceleration could lead to the acceleration of the maturity
of any
other series of the company's long-term debt and certain other indebtedness
of
the company and its subsidiaries. In addition, if the noteholders obtain
the
ability to accelerate any series of the outstanding indebtedness, an event
of
default will result under the revolving credit facility of Navistar Financial
Corporation, the company's captive finance subsidiary (NFC). If that were
to
occur, unless NFC were able to obtain a waiver, it could no longer incur
additional indebtedness under the revolving credit facility and the lenders
would have the ability to terminate the facility and demand immediate payment
of
all outstanding amounts, which as of the date hereof is approximately $836
million. Such a demand for payment would result in defaults under numerous
other
credit facilities and other agreements of NFC and its affiliates.
The
company believes that it has adequate resources available in the form of
cash on
hand and borrowings under the Loan Facility described above in Item 1.01
to
continue to fund its operations and believes that the receipt of the above
described notices of default will not have a material adverse effect on
the
company’s liquidity position or financial condition. If the maturity of any debt
is accelerated, the company intends to utilize the borrowing committed
under the
Loan Facility, upon satisfaction of the terms and conditions set forth
in the
Commitment Letter, to fully retire all such amounts.
A
copy of
the press release issued by the company on February 9, 2006 is attached as
Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein
by
reference.
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4
ITEM
9.01 FINANCIAL
STATEMENTS AND EXHIBITS
The
following Exhibit is deemed to be filed under the Securities
Exchange Act of 1934, as amended.
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(d)
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Exhibits
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Exhibit
No.
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Description
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Page
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99.1
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Press
Release dated February 9, 2006
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E-1
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Forward-looking
information
Information
provided and statements made that are not purely historical are forward -looking
statements within the meaning of Section 27A of the Securities Act, Section
21E
of the Exchange Act, and the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements only speak as of the date of this report and
we
assume no obligation to update the information included in this report, whether
as a result of new information, future events or otherwise. Such forward-looking
statements include information concerning our possible or assumed future results
of operations, including descriptions of our business strategy. These statements
often include words such as “believe,” “expect,” “anticipate,” “intend,” “plan,”
“estimate” or similar expressions. These statements are not guarantees of
performance or results and they involve risks, uncertainties and assumptions,
including the risk of continued delay in the completion of our financial
statements and the consequences thereof, the availability of funds, either
through cash on hand or the company’s other liquidity sources, to repay any
amounts due should any of the notes become accelerated, and decisions by
suppliers and other vendors to restrict or eliminate customary trade and other
credit terms for the company’s future orders and other services, which would
require the company to pay cash and which could have a material adverse effect
on the company’s liquidity position and financial condition. Although we
believe that these forward-looking statements are based on reasonable
assumptions, there are many other factors that could cause actual results to
differ materially from those in the forward-looking statements. For a
further description of these and other factors, see Exhibit 99.1 to our Form
10-K for the fiscal year ended October 31, 2004.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
NAVISTAR
INTERNATIONAL CORPORATION
Registrant
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Date:
February 9, 2006
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/s/Mark
T. Schwetschenau
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Mark
T. Schwetschenau
Senior
Vice President and Controller
(Principal
Accounting Officer)
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