

	As of October 31,
(in millions)	2020		2019
Manufacturing operations
Senior Secured Term Loan Credit Agreement, due 2025, net of unamortized discount of $5 and $6, respectively, and unamortized debt issuance costs of $8 and $10, respectively	$	1,543	$	1,556
9.5% Senior Secured Notes, due 2025, net of unamortized debt issuance costs of $11	589		—
6.625% Senior Notes, due 2026, net of unamortized debt issuance costs of $13 and $15, respectively	1,087		1,085
Loan Agreement related to 4.75% Tax-Exempt Bonds, due 2040, net of unamortized debt issuance costs of $2	223		—
Loan Agreement related to 6.75% Tax-Exempt Bonds, due 2040, net of unamortized debt issuance costs of $5	—		220
Financed lease obligations	45		60
Other	9		11
Total Manufacturing operations debt	3,496		2,932
Less: Current portion	45		32
Net long-term Manufacturing operations debt	$	3,451	$	2,900



	As of October 31,
(in millions)	2020		2019
Financial Services operations
Asset-backed debt issued by consolidated SPEs, at fixed and variable rates, due serially through 2022, net of unamortized debt issuance costs of $3 and $4, respectively	$	724	$	991
Bank credit facilities, at fixed and variable rates, due dates from 2021 through 2025, net of unamortized debt issuance costs of $1 and $1, respectively	940		1,059
Commercial paper, at variable rates, program matures in 2022	—		84
Borrowings secured by operating and finance leases, at various rates, due serially through 2024	170		122
Total Financial Services operations debt	1,834		2,256
Less: Current portion	595		839
Net long-term Financial Services operations debt	$	1,239	$	1,417

We have a senior secured term loan credit facility in an aggregate principal amount of $1.6 billion (“Term Loan Credit Agreement”), guaranteed by Navistar International Corporation and twelve of its subsidiaries. Under the terms of the Term Loan Credit Agreement, the interest rate on the outstanding loan is based, at our option, on an adjusted Eurodollar Rate, plus a margin of 3.50%, or a Base Rate, plus a margin of 2.50%. The Term Loan Credit Agreement requires quarterly amortization payments of $4 million with the balance due at maturity on November 6, 2024. A portion of the proceeds from the Term Loan Credit Agreement was used to repay all outstanding loans under our previously existing Senior Secured Term Loan Credit Facility ("Term Loan"), to redeem a portion of the previously outstanding 8.25% senior notes ("8.25% Senior Notes") and to pay accrued and unpaid interest thereon, and pay certain transaction fees and expenses incurred in connection with the new Term Loan Credit Agreement.

On April 27, 2020, we issued $600 million aggregate principal amount of 9.5% senior secured notes, due 2025 ("9.5% Senior Secured Notes"). Interest is payable on May 1 and November 1 of each year beginning on November 1, 2020 until the maturity date of May 1, 2025. The proceeds from the 9.5% Senior Secured Notes are being used for general corporate purposes in addition to certain transaction fees and expenses incurred in connection with the new 9.5% Senior Secured Notes. Debt issuance costs of $12 million were recorded as a direct deduction from the carrying amount and will be amortized through Interest expense over the life. The 9.5% Senior Secured Notes are subject to specific redemption pricing, restrictive payments, and change of control provisions.

On November 6, 2017, we issued $1.1 billion in aggregate principal amount of 6.625% senior notes, due 2026 ("6.625% Senior Notes"). Interest is payable on the 6.625% Senior Notes on May 1 and November 1 of each year beginning on May 1, 2018 until the maturity date of November 1, 2025. The proceeds from the 6.625% Senior Notes offering were used to redeem a portion of our previously existing 8.25% Senior Notes, to pay accrued and unpaid interest thereon, and pay the associated prepayment premiums, certain transaction fees and expenses incurred in connection with the new 6.625% Senior Notes.

On November 6, 2017, there was an amendment to the Tax-Exempt Bonds that increased the interest rate to 6.75% and granted of a junior priority lien on certain collateral securing the Company's Term Loan Credit Agreement. We entered into the First Amendment to Loan Agreement with The County of Cook, Illinois and the First Amendment to Loan Agreement with the Illinois Finance Authority (“Tax-Exempt Bond Amendments”) to adjust various covenants included in the loan agreements relating to the Tax-Exempt Bonds, including to permit the Company to incur secured debt up to $1.7 billion, in exchange for a coupon increase from 6.50% to 6.75% and the grant of a junior priority lien on certain collateral securing the Company’s Term Loan Credit Agreement. The Tax-Exempt Bonds were repaid on October 15, 2020 using the proceeds from the 2020 Bonds (as defined below). The early repayment of these Tax-Exempt Bonds resulted in the write off of unamortized debt issuance costs of $5 million.

On August 4, 2020, we completed a certain tax-exempt bond refinancing in which the Illinois Finance Authority (the “IFA”) issued and sold $225 million aggregate principal amount of Recovery Zone Facility Revenue Refunding Bonds (Navistar International Corporation Project) Series 2020 due October 15, 2040 ("the 2020 Bonds"). The proceeds from the issuance of the 2020 Bonds were used, together with certain other funds of the Company, for the purposes of refunding (1) the $135 million aggregate principal amount of IFA Recovery Zone Facility Revenue bonds (Navistar International Corporation Project), Series 2010 due October 15, 2040 and (2) $90 million aggregate principal amount of The County Cook, Illinois Recovery Zone Facility Revenue Bonds (Navistar International Corporation Project), Series 2010 due October 15, 2040 (collectively the "2010 Bonds") on October 15, 2020. The interest rate on the 2020 Bonds is 4.75%. The 2020 Bonds were issued pursuant to an indenture of trust and the proceeds of the 2020 Bonds were loaned by IFA to the Company pursuant to a loan agreement and promissory note, each dated as of July 1, 2020. The payment of principal and interest on the 2020 Bonds is guaranteed under a guarantee issued by NI. The 2020 Bonds are special, limited obligations of the IFA, payable out of the revenues and income derived under the related loan agreement, promissory note and guarantee. Beginning on August 1, 2030, the 2020 Bonds are subject to optional redemption at the direction of the Company, in whole or in part. In addition, if the Company is acquired by TRATON SE or one of its affiliates, the Company may, at its option, redeem all, but not less than all, of the 2020 Bonds. In each case, the Company will pay a redemption price equal to 100% of the principal amount thereof, plus accrued interest, if any, to the redemption date. The 2020 Bonds are senior unsecured general obligations with a subsidiary guaranty from NI.

Prior to the adoption of ASC 842, we accounted for as borrowings certain third-party equipment financings by BMO (as defined in Note 15, Commitments and Contingencies), our preferred source of retail customer financing for equipment offered by us and our dealers in the U.S. The initial transactions did not qualify for revenue recognition as we retained control of the leased property. As a result, the proceeds from the transfers were recorded as a financed lease obligation and amortized to revenue over the term of the financing. The remaining obligation will be amortized through 2024, with interest rates ranging from 3.77% to 5.91%.

We have a $125 million asset-based credit facility ("Amended and Restated Asset-Based Credit Facility") which has a maturity date of August 2022. The borrowing base of the revolving facility is secured by a first priority security interest in certain of NI's aftermarket parts inventory locations and contains customary covenants, representations and warranties. Our borrowing capacity is subject to a $13 million liquidity block and is impacted by outstanding standby letters of credit issued under this facility and the amount of eligible inventory. Borrowings under the Amended and Restated Asset-Based Credit Facility accrue interest at a rate equal to a base rate or an adjusted LIBOR rate plus a spread. The spread is 175 basis points for Base Rate borrowings and 275 basis points for LIBOR borrowings. As of October 31, 2020 and 2019, we had no borrowings outstanding but did have availability to borrow under the Amended and Restated Asset-Based Credit Facility. Amounts borrowed under this facility for the twelve months ended October 31, 2020 were $60 million. Repayments under this facility for the twelve months ended October 31, 2020, were $60 million. These borrowings and repayments are classified under the line item Net change in secured revolving credit facilities in the Consolidated Statements of Cash Flows. There were no borrowings or repayments in the years ended 2019 and 2018.

In December 2017, the maturity date of the variable funding notes ("VFN") facility was extended from May 2018 to December 2018, and the maximum capacity was reduced from $425 million to $350 million. In November 2018, the maturity of the VFN facility was extended from December 2018 to May 2020. In April 2019, the VFN facility capacity was temporarily increased from $350 million to $550 million until the earlier of June 28, 2019, or the completion of a qualifying wholesale asset-backed term facility. In June 2019, the capacity decreased from $550 million to $350 million, upon the sale of $300 million of two-year investor notes by Navistar Financial Securities Corporation ("NFSC"). Proceeds were used, in part, to replace the $250 million of investor notes that matured in June 2019. In May 2020, the maturity date of the VFN facility was extended to May 2021, and the maximum capacity remained $350 million. The VFN facility and investor notes are secured by assets of the wholesale note owner trust. Amounts borrowed under this facility for the twelve months ended October 31, 2020, 2019 and 2018 were $300 million, $1,495 million and $590 million, respectively. Repayments under this facility for the twelve months ended October 31, 2020, 2019 and 2018 were $515 million, $1,540 million and $455 million, respectively. These borrowings and repayments are classified under the line item Net change in secured revolving credit facilities in the Consolidated Statements of Cash Flows.

In September 2018, NFSC issued $300 million of two-year investor notes secured by assets of the wholesale note owner trust. Proceeds were used, in part, to replace the $300 million of investor notes that matured in September 2018. In July 2020, NFSC issued $300 million of two-year investor notes secured by assets of the wholesale note owner trust. Proceeds were used, in part, to replace the $300 million of NFSC investor notes that matured in September 2020.

In January 2018, Truck Retail Accounts Corporation ("TRAC"), a special purpose, wholly-owned subsidiary of NFC, extended its one-year $100 million revolving facility from April 2018 to January 2019, and in December 2018, the maturity was further extended to January 2020. In April 2019, the maximum capacity of the TRAC funding facility was increased from $100 million to $150 million, and further increased to $200 million in October 2019. In January 2020, the TRAC funding facility was renewed and extended to June 2021, with a capacity range of $100 million to $200 million. Borrowings under this facility are secured by eligible retail accounts receivable. Amounts borrowed under this facility for the twelve months ended October 31, 2020, 2019 and 2018 were $294 million, $800 million and $336 million, respectively. Repayments under this facility for the twelve months ended October 31, 2020, 2019 and 2018 were $334 million, $743 million and $336 million, respectively. These borrowings and repayments are classified under the line item Net change in secured revolving credit facilities in the Consolidated Statements of Cash Flows.

The majority of the above asset-backed debt is issued by consolidated SPEs and is payable out of collections on the finance receivables sold to the SPEs. This debt is the legal obligation of the SPEs and not NFC or NFM. Assets used as collateral include finance receivables, restricted cash and other assets. The carrying amount of the assets used as collateral for asset-backed debt were $1.1 billion and $1.3 billion at October 31, 2020 and 2019, respectively. See Note 4, Finance Receivables, for more information on finance receivables used to secure asset-backed debt.

On June 1, 2018, in accordance with the terms of the May 2016 amended and extended NFC bank credit facility, the term loan portion was paid in full and the revolving portion capacity was reduced from $275 million to $269 million. On June 12, 2018, certain leverage covenants and baskets under the NFC bank credit facility were amended to allow for completion of the senior secured NFC term loan ("NFC Term Loan") in July 2018. In May 2019, NFC increased the capacity of its revolving bank credit facility from $269 million to $748 million and extended the maturity from September 2021 to May 2024. The additional capacity was used to fully repay the NFC Term Loan balance of $398 million. The early repayment of the NFC Term Loan resulted in the write off of unamortized debt issuance costs and discount of $6 million. The borrowings on the revolving portion of the facility totaled $538 million and $623 million as of October 31, 2020 and 2019, respectively.

We borrow funds under various bank credit lines denominated in U.S. dollars and Mexican pesos to be used for investment in our Mexican financial services operations. As of October 31, 2020, borrowings outstanding under these arrangements were $402 million, of which 20% was denominated in U.S. dollars and 80% in Mexican pesos. As of October 31, 2019, borrowings outstanding under these arrangements were $437 million, of which 11% was denominated in U.S. dollars and 89% in Mexican pesos. The interest rates on the dollar-denominated debt are at a negotiated fixed rate or at a variable rate based on LIBOR, and the interest rates on peso-denominated debt are based on the Interbank Interest Equilibrium Rate.

International Truck Leasing Corporation ("ITLC"), a special purpose, wholly-owned subsidiary of NFC, provides NFC with another source to obtain borrowings secured by leases. The balances are classified under Financial Services operations debt as borrowings secured by leases. ITLC's assets are available to satisfy its creditors' claims prior to such assets becoming available for ITLC's use or to NFC or affiliated companies. For the years ended October 31, 2020 and 2019, ITLC issued new borrowings of $61 million and $31 million, respectively. The balance of these secured borrowings issued by ITLC totaled $117 million and $91 million as of October 31, 2020 and 2019, respectively. The carrying amount of assets used as collateral was $144 million and $109 million as of October 31, 2020 and 2019, respectively. ITLC does not have any unsecured debt.

For the years ended October 31, 2020 and 2019, NFC issued new borrowings secured by leases of $28 million and $31 million, respectively. The balance of these secured borrowings issued by NFC totaled $53 million and $31 million as of October 31, 2020 and 2019, respectively. The carrying amount of assets used as collateral was $51 million and $30 million as of October 31, 2020 and 2019, respectively.

We have certain public and private debt agreements, including the Term Loan Credit Agreement, the 9.5% Senior Secured Notes, the 6.625% Senior Notes, the loan agreements for the 2020 Bonds, and the Amended and Restated Asset-Based Credit Facility, which limit our ability to incur additional indebtedness, pay dividends, buy back our stock, and take other actions. As of October 31, 2020, we were in compliance with these covenants.

We are also required under certain agreements with public and private lenders of NFC to ensure that NFC and its subsidiaries maintain their income before interest expense and income taxes at not less than 125% of their total interest expense. Under these agreements, if NFC's consolidated income, including capital contributions made by NIC or NI, before interest expense and income taxes is less than 125% of its interest expense, NIC or NI must make payments to NFC to achieve the required ratio. During the years ended October 31, 2020, 2019, and 2018, no such payments were made.