NAVISTAR INTERNATIONAL CORPORATION (NYSE:NAV) Files An 8-K Other EventsITEM 8.01
On February 7, 2017, Navistar International Corporation (“Parent”) and Navistar, Inc. (the “Borrower”) entered into an Amendment No. 1 (the “Term Loan Amendment”) to the credit agreement, dated as of August 17, 2012 (as amended and restated as of August 7, 2015, the “Term Loan Credit Agreement”), among Parent, the Borrower, the Lenders (as defined therein) party thereto, and JPMorgan Chase Bank, N.A. (“JPMCB”), as Administrative Agent and Collateral Agent.
The Borrower has determined that the adoption of the Term Loan Amendment constituted a “significant modification” of the Senior Secured Term Loan for federal income tax purposes. Consequently, for federal income tax purposes, the Borrower is deemed to have satisfied the Senior Secured Term Loan by issuing new indebtedness having the terms contained in the Term Loan Amendment.
The amount treated for federal income tax purposes as realized by holders of the Senior Secured Term Loan as a result of the adoption of the Term Loan Amendment is the “issue price” of the deemed new indebtedness. The issue price of the deemed new indebtedness is equal to the fair market value of the Senior Secured Term Loan immediately following the adoption of the Term Loan Amendment if the Senior Secured Term Loan is “traded on an established securities market” within the meaning of the applicable federal income tax regulations.
Based on information provided by JPMCB, the Borrower has determined that (i) the Senior Secured Term Loan is traded on an established securities market within the meaning of the applicable federal income tax regulations and (ii) the fair market value of the amended Senior Secured Term Loan is $997.50 for each $1,000.00 of principal amount. According to the applicable federal income tax regulations, the Borrower’s determination of the fair market value of the amended Senior Secured Term Loan is binding on any holder of such indebtedness unless such holder explicitly discloses that its determination differs from the Borrower’s determination, and describes the basis for making that determination, on its timely filed federal income tax return for the holder’s taxable year that includes the date on which the Term Loan Amendment was adopted.
The statements set forth above are provided solely for the purpose of satisfying certain information disclosure requirements set forth in the federal income tax regulations and do not constitute tax advice. Neither the Parent nor the Borrower have sought any ruling from the Internal Revenue Service (“IRS”) with respect to the statements set forth above, and there can be no assurance that the IRS will agree with such statements. Each holder of indebtedness under the Borrower’s Term Loan Credit Agreement is urged to consult with its own tax advisors to determine the federal income tax consequences, as well as any state, local, foreign and other federal tax consequences, of the adoption of the Term Loan Amendment.
About NAVISTAR INTERNATIONAL CORPORATION (NYSE:NAV)
Navistar International Corporation is a holding company whose principal operating entities are Navistar, Inc. and Navistar Financial Corporation (NFC). The Company’s segments include Truck, Parts, Global Operations (collectively, Manufacturing operations) and Financial Services, which consists of NFC and its foreign finance operations (collectively, Financial Services operations). The Truck segment manufactures and distributes Class 4 through 8 trucks, buses and military vehicles under the International and IC Bus brands, along with production of engines. The Parts segment supports its brands of International commercial trucks, IC buses and engines. The Global Operations segment includes operations of its subsidiary, International Industria de Motores da America do Sul Ltda. (IIAA). The Financial Services segment provides and manages retail, wholesale and lease financing of products sold by the Truck and Parts segments and their dealers. NAVISTAR INTERNATIONAL CORPORATION (NYSE:NAV) Recent Trading Information
NAVISTAR INTERNATIONAL CORPORATION (NYSE:NAV) closed its last trading session up +0.50 at 25.77 with 468,759 shares trading hands.