Navistar gets 8% and 9 3/8% consents, extends consent solicitations

New York, May 25 - Navistar International Corp. said it has received the required amount of noteholder consents to proposed indenture changes from the holders of its 8% senior subordinated notes due 2008 as part of a previously announced tender offer for those notes, and has received the required consents from the holders of its 9 3/8% senior notes due 2006 to allow related refinancing transactions.

A majority of the 8% noteholders had tendered their notes and delivered consents and a majority of the 9 3/8% noteholders had delivered consents in a separate solicitation.

Although it has already received the required consents from the holders of each series of notes under its respective consent solicitations, Navistar extended the consent periods of both (by which time holders had to deliver consents to be eligible for payment of a consent payment) to 5 p.m. ET on May 26, subject to possible further extension, from the originally announced 5 p.m. ET on May 24. It also raised the amount of the consent payment it is offering to the 9 3/8% noteholders to $10 per $1,000 principal amount from the originally announced $5 per $1,000.

As previously announced, Navistar, a Warrenville, Ill.-based, truck maker, said on May 11 that it had begun a cash tender offer for its $250 million of 8% notes as part of a refinancing of that debt and said that it was also looking to amend the terms of its $400 million 9 3/8% notes to allow for the refinancing.

In the tender offer, it set a consent deadline of 5 p.m. ET on May 24 (subsequently extended) and said the tender offer would expire at 5 p.m. ET on June 9, subject to possible extension.

Under the cash tender offer for the 8% notes, Navistar is offering to pay $1,029.20 per $1,000 principal amount for notes tendered by the consent deadline; for notes tendered after that time but before the expiration, the payment will be par. In both cases Navistar will pay accrued interest up to but not including the date of payment.

Navistar is also soliciting consents to amend the 8% note indenture that would eliminate or modify substantially all of the restrictive covenants and certain events of default provisions.

Holders may not consent without tendering or tender without delivering consents.

Navistar plans to call any notes not tendered at the call price of $1,026.70 per $1,000 principal amount.

For the $400 million 9 3/8% senior notes due 2006, Navistar is soliciting consents to amend the indenture to allow for the refinancing of the senior subordinated notes, to amend certain covenants and to permit the assumption of the finance subsidiary's convertible subordinate debt.

The consent solicitation will run through 5 p.m. ET on May 24. Holders who deliver consents will receive $5.00 per $1,000 principal amount of notes (the consent period was subsequently extended and the consent payment raised).

The company said funding for its tender offer and related transactions would come from a capital markets transaction - although Navistar did not initially disclose further details. It said the entire process was expected to be completed by May 28. As part of the refinancing, Navistar plans to assume the $220 million 4¾% convertible subordinated debt due 2009 from its Navistar Financial Corp. finance subsidiary. It will receive $170 million in cash from the subsidiary as compensation for assumption of the debt. Navistar previously received $50 million as compensation for providing the shares in case the bonds convert.

JP Morgan is dealer manager and solicitation agent (call 212 270-1200 or 800 245-8812). Requests for documentation may be made to Global Bondholder Services (call 212 430-3774 or 866 857-2200).

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