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Navistar International Corporation (NAV - Analyst Report) announced the amendment of its $1 billion senior secured term loan facility. Under the amendment, maturity date was extended from Jul 16, 2014 to Aug 17, 2017 and it is expected to include an interest rate repricing.

On Aug 2012, Navistar, had borrowed an aggregate principal amount of $1 billion under the Term Loan Credit Facility. The proceeds from this loan were used to repay all borrowings under Navistar's existing Asset-Based Credit Facility.

Navistar also intended to use the term loan for supporting the adoption of after-treatment solution, which will accelerate delivery of the company’s next-generation clean engine solution. The facility will also support the market transition plan for Class 8 engines, thus providing financial flexibility to the company.

However, the company’s interest expenses had increased due to this additional borrowing. Interest expenses increased $13 million in the first quarter of fiscal 2013 due to the additional term loan facility.

Apart from the amendment, Navistar also announced that it is planning to offer $300 million of unsecured debt. The proceeds from this debt will be used to repay some amount of the term loan.

Warrenville, Ill-based Navistar International manufactures and sells commercial trucks, mid-range diesel engines, buses, military vehicles and chassis for motor homes and step-vans. It also provides service parts for various trucks and trailers. Currently, the company retains a Zacks Rank #3 (Hold) on its stock.

Navistar recorded narrower loss of $114.0 million or $1.42 per share in the first quarter of fiscal 2013 ended Jan 31, 2013 compared with $144.0 million or $2.06 per share in the year-ago quarter. The loss per share was also better than the Zacks Consensus Estimate of a loss of $1.63 per share.

Revenues declined 12.4% year over year to $2.6 billion in the quarter, missing the Zacks Consensus Estimate of $2.8 billion. The year-over-year decline in revenues was due to sluggish industry demand and lower market share of the company due to its transition to clean engine systems as per EPA regulation.

Few stocks that are performing well in the industry where Navistar operates include STRATTEC Security Corporation (STRT - Snapshot Report), Gentherm Incorporated (THRM - Snapshot Report) and China Zenix Auto International Limited . Strattec Security and Gentherm are Zacks Rank #1 (Strong Buy) stocks while China Zenix Auto carries a Zacks Rank #2 (Buy).

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