LISLE, Ill., Feb. 21, 2019 /PRNewswire/ -- Navistar
International Corporation (NYSE: NAV) today announced that Navistar
Canada ULC, its wholly owned subsidiary, on behalf of its pension
plans, has purchased group annuity contracts from RBC Life
Insurance Company (RBC Insurance) and iA Financial Group that
transfer approximately $268 million
($333 million CAD) in obligations,
and related assets, of defined benefit pension plans in
Canada to these two Canadian
insurers. The transactions are aligned with Navistar's strategic
priority to strengthen its balance sheet by lowering risk
volatility in its pension plan obligations.
Under the agreements, the two Canadian insurers will issue
annuities covering the responsibility for pension benefits owed to
approximately 1,750 Navistar pensioners and beneficiaries, which
represents the majority of Navistar's pension plan members in
Canada, and will begin
administering all benefits to these members beginning on
May 1, 2019. Pension benefits for
plan participants will not change.
Following the transactions, benefits for plan participants are
now protected under Assuris, the life insurance
compensation association designated under the Insurance
Companies Act of Canada, versus
prior protection under the Canadian Pension Benefits Guarantee
Fund. Plan participants have been sent information packages
containing further details.
"We're pleased to partner with RBC Insurance and iA Financial
Group to secure pension benefits for our Canadian retirees and
their beneficiaries," said Walter G.
Borst, executive vice president and Chief Financial Officer,
Navistar International Corp. "These transactions continue our
objective to de-risk the balance sheet and manage future pension
obligations, while retirees and their beneficiaries will receive
equivalent pension benefits from highly rated insurance companies,
who have strong expertise in long-term management of retirement
benefits."
As a result of the transactions, which were funded by existing
plan assets and required no cash contributions to Navistar Canada's
pension plans, Navistar reduced its pension plan benefit
obligations by approximately 8 percent. Navistar expects to
recognize a non-cash pension settlement charge of approximately
$142 million ($104 million after-tax) in its fiscal first
quarter of 2019 financial results that will be excluded in its
non-GAAP results. Going forward, the transactions reduce Navistar's
non-operating financial risk and administrative costs.
Morneau Shepell, a leading
consulting firm with expertise in pension risk, advised Navistar on
the transactions.
About Navistar
Navistar International Corporation
(NYSE: NAV) is a holding company whose subsidiaries and affiliates
produce International® brand commercial trucks,
proprietary diesel engines, and IC Bus® brand school and
commercial buses. An affiliate also provides truck and diesel
engine service parts. Another affiliate offers financing services.
Additional information is available at www.Navistar.com.
Forward-Looking Statement
Information provided and
statements contained in this report that are not purely historical
are forward-looking statements within the meaning of the federal
securities laws. Such forward-looking statements only speak as of
the date of this report and the company assumes no obligation to
update the information included in this report. Such
forward-looking statements include information concerning our
possible or assumed future results of operations, including
descriptions of our business strategy. These statements often
include words such as believe, expect, anticipate, intend, plan,
estimate, or similar expressions. These statements are not
guarantees of performance or results and they involve risks,
uncertainties, and assumptions. For a further description of these
factors, see the risk factors set forth in our filings with the
Securities and Exchange Commission, including our annual report on
Form 10-K for the fiscal year ended October
31, 2018. Although we believe that these forward-looking
statements are based on reasonable assumptions, there are many
factors that could affect our actual financial results or results
of operations and could cause actual results to differ materially
from those in the forward-looking statements. All future written
and oral forward-looking statements by us or persons acting on our
behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to above. Except for our ongoing
obligations to disclose material information as required by the
federal securities laws, we do not have any obligations or
intention to release publicly any revisions to any forward-looking
statements to reflect events or circumstances in the future or to
reflect the occurrence of unanticipated events.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/navistar-canada-purchases-group-annuity-contracts-transferring-canadian-pension-obligations-and-assets-300799502.html
SOURCE Navistar International Corporation