TEXT - S&P revises Navistar Financial S.A. de C.V. outlook

Thu Dec 20, 2012 11:40am EST

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OVERVIEW

     -- We revised our outlook on Navistar Financial S.A. de C.V. SOFOM E.N.R. 
(NF) as a commercial finance servicer for the Mexican market to stable from 
negative. 
     -- We affirmed our STRONG ranking as a commercial finance servicer.
     -- The affirmed ranking reflects the information provided by the company 
and our site visit performed on Nov. 22, 2012.
     -- Our financial position for NF is Sufficient.
 
MEXICO CITY (Standard & Poor's) Dec. 20, 2012--Standard & Poor's Ratings 
Services today revised its outlook on Navistar Financial S.A. de C.V. SOFOM 
E.N.R. (NF) to stable from negative as a commercial finance servicer for the 
Mexican market. At the same time, we affirmed our STRONG ranking on the 
company.

NF has been in the Mexican market for 15 years as a financing provider for, 
and a subsidiary of, Navistar International Corp. Inc. a leading producer of 
medium and heavy trucks and severe service vehicles. 

Our review of the outlook reflects the improvement of the automation level of 
its operations particularly for originations and collections and the 
standardization of its principal policies and procedures, while maintaining 
proficient management, organizational and loan administration capabilities 
that correspond with our STRONG servicer ranking.

In our opinion, the projects implemented since our last review in May 2011, 
which include the implementation of new IT applications and the reorganization 
of the areas that support NF's internal control mechanisms, could continue 
contributing to the mitigate the level of operative risk and with it achieve 
better efficiency levels for its servicing operations. 

KEY RANKING FACTORS

Strengths:
     -- Highly experienced management team and professional staff;
     -- Well-segregated organizational structure with dedicated personnel for 
all critical servicing functions;
     -- Comprehensive training program that reflects NFCX's commitment to 
improve staff's skills; 
     -- Robust IT platform that allows the company to perform servicing 
operations through a highly automated environment;
     -- Adequate mechanisms to monitor and control risks;
     -- Appropriate asset administration capabilities that enable the company 
to manage adequately a diverse asset portfolio; and
     -- Low delinquency levels of its portfolio indicate efficient and 
consistent servicing over the past five years.

Weaknesses:
     -- BCP's procedures still lack of communications schemes to achieve 
better efficiencies;
     -- Servers' room security conditions could be enhanced to maintain the 
same security level in all the facilities of the company; and
     -- Non-operative policies and procedures have not been reviewed and 
standardized by the recently created process area.
 
OUTLOOK

The outlook is now stable. We believe, the initiatives implemented since our 
last review will be stabilized in the following 12-18 months allowing the 
company to continue strengthen its management, organizational, and loan 
administration capabilities as a commercial finance servicer.
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