Navistar $200 million exchangeables talked at 5.0-5.5% yield, up 22.5-27.5%

By Ronda Fears

Nashville, Tenn., March 15 - A unit of Navistar International Corp. launched a $200 million seven-year exchangeable note that converts into Navistar stock on Friday. Guidance puts the yield at 5.0% to 5.5% and initial conversion premium at 22.5% to 27.5%. Banc of America Securities and Salomon Smith Barney are joint book-running lead managers of the Rule 144A deal, which will be sold by Navistar Financial Corp. and is set to price Tuesday.

The subordinated notes will be non-callable for three years.

Co-managers are Credit Suisse First Boston, JPMorgan and Scotia Capital Markets.

Warrenvillle, Ill.-based Navistar, the largest U.S. truck and midrange diesel engine maker, said it would use proceeds for general corporate purposes.

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