SEC Probes Navistar Finances

Navistar International Corp. says the U.S. Securities and Exchange Commission has requested information about the company's "accounting and disclosure matters" dating back to November 2010.

The Lisle, Ill.-based maker of diesel engines and heavy-duty trucks says it is cooperating with the investigation. Analysts speculate the SEC is probing whether Navistar properly disclosed the seriousness of its difficulties in developing a Class 8 diesel engine that complies with 2010 federal emission standards.

The company says it has reached a non-binding memorandum of understanding with rival Cummins Inc., which will supply a urea-based aftertreatment system to enable Navistar to meet emissions standards. Until the new engine is ready, the company expects to pay fines on sales of heavy-duty trucks with the noncompliant engine.

Amid the uncertainty, Navistar withdrew its full-year earnings forecast. The company promises to provide a revised outlook next month when it reports financial results for the fiscal third quarter ended July 31. Navistar expects to post a pretax loss of $105 million-$145 million for that quarter.

The company says a bank consortium led by JPMorgan Chase & Co. and Goldman Sachs Group Inc. has committed to making a $1 billion five-year term loan that will enable Navistar to boost liquidity and repay debt.