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