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Navistar International is a manufacturer of commercial and military trucks, proprietary diesel engines, school and commercial buses, as well as a provider of service parts for both trucks and diesel engines. The firm also maintains a wholly-owned financial subsidiary, through which they are able to provide retail, wholesale, and lease financing services for their products. NAV ranks amongst the four major North American Class 8 truck manufacturers, with its Class 8 market share up 2 pts in 2Q18, now outpacing the industry. NAV operates across four segments: Truck, Parts, and Global Operations (collectively the firm's manufacturing operations) as well as Financial Services, which consists of Navistar Financial Corporation and foreign financing operations. The Truck segment contributes the most to the firm's top line (with 67% of FY17 revenues), followed by Parts at 27%, Global Operations with 4%, and Financial services with 2%. In terms of profitability, Trucks and Financial Services were the only segments to not lose money last year, with Trucks carrying the company's revenue increase due to higher core market volumes in FY17. (02 Jul 2018)

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Navistar 3Q18: Another Strong Quarter

HY Note: 07 Sep 2018, 5:07 AM ET - Navistar reported another set of strong results and upwardly revised its FY18 guidance for the third time in as many quarters. We maintain our constructive view but acknowledge that uncertain trade dynamics could impact performance.

HY Note: US Autos Underperformance

HY Note: 07 Sep 2018, 5:06 AM ET - Automotive is the worst performing sector YTD within US HY bonds with excess returns of -3.8% vs +2.3% for ML HY Index. We have had a negative view on all the names driving these negative returns including ATD, TEN, ADNT and TSLA. 

Navistar Financial: $400 mn Term Loan for Dividend

Worth Watching: 19 Jul 2018, 11:08 AM ET - Navistar Financial , an infrequent borrower and the captive finance arm of high-yield truck maker Navistar Inc., is tapping the loan market with a $400 mn seven-year TLB. The loan will be used to fund a $150 mn distribution to the parent with t ..

US Industrials: Macro Data Points

Sector Analysis: 12 Jun 2018, 1:59 AM ET - In this report, we tied the positive tone from Industrial management teams to select economic data points.

Navistar 2Q18: VW Partnership Boon; Takeover Looms

HY Note: 05 Jun 2018, 9:09 PM ET - Navistar recorded robust 2Q18 results and upgraded its full year guidance for the second consecutive quarter thanks to sustained Class 8 demand strength.

Parker: 3Q18 | Shifting to Market perform

Earnings Note: 26 Apr 2018, 9:13 PM ET - PH’s earnings were strong, but with the equity now under pressure and debt reduction plans nearing completion we anticipate a capital allocation change soon. We take our Outperform on the credit to a Market perform.

VW: Why Do Buses Come in Threes?

IG Note: 15 Apr 2018, 10:24 PM ET - While we have already outlined our initial thoughts to the various changes taking place at VW, we take a closer look at segment valuations and the Truck and Bus unit.

US Cap Goods: Event Risk = Sector Underperformance

IG Note: 21 Mar 2018, 5:23 AM ET - The Capital Goods Index has been the worst performing sector on an excess return basis year-to-date. Sector returns severely lagged the Index in January with GE and UTX being notable underperformers to date.

HY Note: American Axle 8Y NC3 Notes

HY Note: 12 Mar 2018, 11:09 AM ET - AXL is issuing $350 mn 8Y NC3 notes to refinance $400 mn 6.25% 2021 notes that are concurrently being tendered for 101.875. We are constructive around AXL’s de-leveraging plan following the Metaldyne acquisition. Maintain outperform.  

Navistar 1Q18: Keep on Trucking

HY Note: 09 Mar 2018, 6:04 AM ET - NAV's strong results and upgraded its full year guidance against the backdrop of record Class 8 market outlook. Section 232 tariffs could provide a trucking boost in the short term, but we remain concerned around longer term economic impact

US Strategy: Tariffs as Repricing Event?

Strategy Analysis: 01 Mar 2018, 9:40 PM ET - The market has been building in very low odds of a trade war event, a NAFTA withdrawal, or a significant escalation of tit-for-tat trade retaliations on a broader scale.  The odds-makers just got a fresh load of input.

Section 232: The NAFTA Conundrum

Sector Analysis: 26 Feb 2018, 3:42 AM ET - Using Section 232 on Steel/Aluminum could damage supplier chains and cost structures and drive broader inflation.  A tariff gambit in such key industries could undermine the NAFTA negotiations and have immediate effects on risk pricing. 

HY Note: US Autos Reprice

HY Note: 15 Feb 2018, 4:47 AM ET - YTD18 HY Automotive is among the worst-performing sectors at total returns of -2.0% vs. the HY Index at -0.9%. The recent HY redemption wave is likely driving some selling pressure on BB-rated lower-yielding auto paper. 

CNHI 4Q17: Supportive Positive Trends

Earnings Note: 31 Jan 2018, 9:11 AM ET - CNHI reported results highlighting positive trends in end-market demand which contributed to better operating performance. Credit metrics continue to strengthen at the Capital Goods bellwether and we maintain our O/P on CNHI bonds.

US Industrial 2018 Outlook: Conglomerate Conundrum

Sector Analysis: 21 Jan 2018, 9:58 PM ET - Against the backdrop of a generally favorable global demand environment, event risk is the key 2018 credit concern for the conglomerate peer group. We focus on this topic and revisit our credit recommendations for more than two dozen firms.

Navistar 4Q17: Wheels of Progress

Earnings Note: 19 Dec 2017, 1:43 PM ET - NAV’s results continued to improve in 4Q17 with the company poised to report even stronger results in 2018 against the backdrop of stellarindustry volumes. The VW Alliance is yielding results and positioning NAV well for the mega trends.

CNH Industrial: Issuing New 10Y US$ Bonds

Worth Watching: 09 Nov 2017, 1:23 PM ET - CNH Industrial is issuing new 10-year US dollar bonds out of the CNH Industrial N.V. (parent) entity. CNH Industrial has one other US$ bond outstanding at the parent level, the 4.5% 8/2023 bond (Ba2/BBB -/BBB-), which trades at a spread of G+12 ..

HY Note: Navistar Refi New Issue

HY Note: 02 Nov 2017, 11:25 AM ET - As expected, Navistar is in the market to issue $1.1 bn 8Y NC3 notes to refinance its existing 8.25% 2021 notes.  Above the mid 6% area, we view NAV bonds as a buy.  

Caterpillar: 3Q17 | Knocks the Cover off the Ball

Earnings Note: 24 Oct 2017, 8:11 PM ET - Caterpillar’s earning trajectory has been on a favorable trend line in 2017 and the trend continued into the third quarter with a set of strong results. The quarter did not change our view of the credit and we remain at a Market perform.

Navistar 3Q17: Refinancing on the Horizon?

HY Note: 06 Sep 2017, 9:34 PM ET - An improving NA truck market is currently supporting NAV's results and the VW equity stake is anchoring it's credit story, setting the stage for the consideration of debt refinancing to extend maturities.

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