Debt



(in millions)	April 30, 2015		October 31, 2014
Manufacturing operations
Senior Secured Term Loan Credit Facility, as amended, due 2017, net of unamortized discount of $3, at both dates	$	694	$	694
8.25% Senior Notes, due 2021, net of unamortized discount of $19 and $20, respectively	1,181		1,180
4.50% Senior Subordinated Convertible Notes, due 2018, net of unamortized discount of $17 and $19, respectively	183		181
4.75% Senior Subordinated Convertible Notes, due 2019, net of unamortized discount of $36 and $40, respectively	375		371
Debt of majority-owned dealerships	28		30
Financing arrangements and capital lease obligations	50		54
Loan Agreement related to 6.5% Tax Exempt Bonds, due 2040	225		225
Promissory Note	5		10
Financed lease obligations	141		184
Other	24		29
Total Manufacturing operations debt	2,906		2,958
Less: Current portion	115		100
Net long-term Manufacturing operations debt	$	2,791	$	2,858



(in millions)	April 30, 2015		October 31, 2014
Financial Services operations
Asset-backed debt issued by consolidated SPEs, at fixed and variable rates, due serially through 2018	$	986	$	914
Bank revolvers, at fixed and variable rates, due dates from 2015 through 2020	1,205		1,242
Commercial paper, at variable rates, program matures in 2017	77		74
Borrowings secured by operating and finance leases, at various rates, due serially through 2018	29		36
Total Financial Services operations debt	2,297		2,266
Less: Current portion	1,096		1,195
Net long-term Financial Services operations debt	$	1,201	$	1,071

Manufacturing Operations

3.00% Senior Subordinated Convertible Notes

In October 2009, we completed the sale of $570 million aggregate principal amount of 3.00% senior subordinated convertible notes ("2014 Convertible Notes"), including over-allotment options. The 2014 Convertible Notes were senior subordinated unsecured obligations of the Company.

In connection with the sale of the 2014 Convertible Notes, the Company purchased call options for $125 million. The call options covered 11,337,870 shares of common stock, subject to adjustments, at an exercise price of $50.27. The call options were intended to minimize share dilution associated with the 2014 Convertible Notes. In addition, in connection with the sale of the 2014 Convertible Notes, the Company also entered into separate warrant transactions whereby, the Company sold warrants for $87 million to sell in the aggregate 11,337,870 shares of common stock, subject to adjustments, at an exercise price of $60.14 per share of common stock.

During the second quarter of 2014, the Company used proceeds from the private issuance of $411 million of 4.75% senior subordinated convertible notes due April 2019 ("2019 Convertible Notes"), as well as cash on-hand, to repurchase $404 million of notional amount of the 2014 Convertible Notes. The Company recorded a charge of $11 million related to the repurchase which was recognized in Other expense (income), net. In conjunction with the repurchases of the 2014 Convertible Notes, call options representing 8,026,456 shares expired or were unwound by the Company and warrants representing 6,523,319 shares were unwound by the Company. On October 15, 2014, upon maturity, the 2014 Convertible Notes were paid in full and the purchased call options expired worthless.

During the first quarter of 2015, warrants representing 1,939,376 shares were unwound by the Company, and the remaining 2,875,175 warrants expired worthless on April 10, 2015.

Financial Services Operations

Asset-backed Debt

In January 2015, the maturity date of the $500 million variable funding notes ("VFN") facility was extended from March 2015 to January 2016.

In November 2014, NFC completed the sale of $250 million of two-year investor notes secured by assets of the wholesale note owner trust. Proceeds were used, in part, to replace the $200 million of investor notes that matured in January 2015. Also in November 2014, the wholesale note owner trust was amended to reduce customer concentration restrictions.

Bank Revolvers and Commercial Paper

In January 2015, NFC paid $125 million in cash dividends to Navistar, Inc. Dividends and certain affiliate loans are subject to the restricted payment covenants set forth in the NFC bank credit facility.

Effective December 2014, our Mexican financial services operation entered into a new two-year commercial paper program for up to P$1.8 billion (the equivalent of approximately US $118 million at April 30, 2015). This program replaces the existing program that was to mature in August 2015.