Navistar unit issues $350 million in securities

AP News
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Posted: Nov 10, 2009 6:25 PM

Navistar Financial said Tuesday 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.

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 3-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. The company's shares fell a penny to $35.65.