S&P gives B- to Navistar loan

Standard & Poor's said it assigned its B- issue-level rating and 2 recovery rating to Navistar International Corp. subsidiary Navistar Inc.'s proposed $1.04 billion senior secured term loan due 2020.

The 2 recovery rating indicates an expectation that lenders will receive substantial recovery (70%-90%; lower end of the range) in a payment default scenario.

Navistar plans to use the proceeds to refinance its existing $697.5 million senior secured term loan due August 2017. The refinancing will extend the maturity of the company’s term loan and provide it with additional liquidity and financial flexibility.

Although the proposed transaction adds additional debt to the company's balance sheet, this is offset by the incremental improvements that Navistar continues to make to its operating performance, S&P said.

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