Navistar International prices $1.5B of offerings

Navistar Int'l prices offerings of $1B in senior notes, $550M in senior convertible notes

• On 7:47 am EDT, Friday October 23, 2009

WARRENVILLE, Ill. (AP) -- Navistar International Corp., which makes commercial trucks and engines, said Thursday that it priced its public offering of $1 billion of its senior notes due 2021.

Navistar also priced its public offering of $550 million of its senior subordinated convertible notes due 2014. That offering was increased from its original amount of $500 million based on market demand, the company said.

The net proceeds will be used to repay Navistar's $1.1 billion term loan and $400 million synthetic revolver senior unsecured credit facilities, which expire in January 2012, as well as for other general corporate purposes.

In connection with the convertible notes offering, Navistar has granted the underwriters of the offering the option to buy up to an additional $75 million of convertible notes to cover possible overallotments.

The senior notes will pay interest semiannually at a rate of 8.25 percent. The convertible notes will pay interest semiannually at a rate of 3 percent and will be convertible into cash, shares of Navistar common stock, or a combination of both at an initial conversion rate of 19.8910 shares per $1,000 of notes, which is equivalent to an initial conversion price of about $50.27 per share.

Both offerings are expected to close on Wednesday.

Credit Suisse, BofA Merrill Lynch, J.P. Morgan, Citi, Deutsche Bank Securities and Goldman, Sachs & Co. are acting as joint underwriters in the offerings.

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