UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

            X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended July 31, 2000

                                       OR

            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        For the transition period from to
                                   ----------
                         Commission File Number 1-4146-1
                                   ----------

                         NAVISTAR FINANCIAL CORPORATION
             (Exact name of Registrant as specified in its charter)

            Delaware                                   36-2472404
  (State or other jurisdiction of         (I.R.S. Employer Identification No.)
   incorporation or organization)

               2850 West Golf Road Rolling Meadows, Illinois 60008
               (Address of principal executive offices) (Zip Code)

         Registrant's telephone number including area code 847-734-4000

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during  the  preceding  12  months  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No

                       APPLICABLE ONLY TO ISSUERS INVOLVED
                        IN BANKRUPTCY PROCEEDINGS DURING
                            THE PRECEDING FIVE YEARS:

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be filed by  Sections  12, 13 or 15 (d) of the  Securities
Exchange Act of 1934 subsequent to the  distribution of securities  under a plan
confirmed by a court. Yes No

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

As of August 31,  2000,  the number of shares  outstanding  of the  registrant's
common stock was 1,600,000.

THE REGISTRANT IS A WHOLLY-OWNED  SUBSIDIARY OF  INTERNATIONAL  TRUCK AND ENGINE
CORPORATION.  AND MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1)(a)
AND (b) OF FORM  10-Q  AND IS  THEREFORE  FILING  THIS  FORM  WITH  THE  REDUCED
DISCLOSURE FORMAT.


<PAGE>








                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                                      INDEX



                                                                           Page

PART I.     FINANCIAL INFORMATION

  Item 1.   Financial Statements:

            Statements of Consolidated Income and Retained Earnings --
            Three Months and Nine Months Ended July 31, 2000 and 1999......  2

            Statements of Consolidated Financial Condition --
            July 31, 2000; October 31, 1999; and July 31, 1999.............  3

            Statements of Consolidated Cash Flow --
            Nine Months Ended July 31, 2000 and 1999.......................  4

            Notes to Consolidated Financial Statements.....................  5

  Item 2.   Management's Discussion and Analysis of Results of
            Operations and Financial Condition.............................  8


PART II.    OTHER INFORMATION

   Item 6.  Exhibits and Reports on Form 8-K............................... 14

Signature   ............................................................... 14


<PAGE>



                         PART I - FINANCIAL INFORMATION


Item 1.   Financial Statements


                 NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
       STATEMENTS OF CONSOLIDATED INCOME AND RETAINED EARNINGS (Unaudited)
                              (Millions of dollars)

<TABLE>
<CAPTION>
                                        Three Months Ended    Nine Months Ended
                                              July 31              July 31
                                           2000     1999        2000     1999
<S>                                      <C>      <C>         <C>      <C>
Revenue
  Retail notes.......................... $ 17.8   $ 23.0      $ 49.4   $ 64.1
  Lease financing.......................   23.4     19.4        68.2     55.1
  Wholesale notes.......................   17.0     16.6        52.6     47.6
  Accounts..............................   10.9      8.9        34.3     26.4
  Servicing fee income..................    8.8      6.0        23.3     17.7
  Insurance premiums earned.............   12.8      8.9        34.4     25.9
  Marketable securities.................    1.8      2.3         5.5      6.7
       Total............................   92.5     85.1       267.7    243.5


Expense
  Cost of borrowing
    Interest............................   26.8     20.6        73.8     64.3
    Other...............................    1.5      1.5         4.4      4.7
       Total............................   28.3     22.1        78.2     69.0

  Credit, collection
    and administrative..................    9.9     10.9        32.5     31.7
  Provision for losses on receivables...    3.0      1.3         6.7      4.5
  Insurance claims and underwriting.....   14.5      9.8        37.6     29.2
  Depreciation expense and other........   13.7     11.6        39.0     32.1
       Total............................   69.4     55.7       194.0    166.5


Income Before Taxes on Income...........   23.1     29.4        73.7     77.0

Taxes on Income.........................    8.9     11.7        28.1     29.8

Net Income..............................   14.2     17.7        45.6     47.2

Retained Earnings

  Beginning of period...................  129.6    113.5       111.2    109.0

  Dividends paid........................   (6.0)   (20.0)      (19.0)   (45.0)

  End of period......................... $137.8   $111.2      $137.8   $111.2

</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE>


                 NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
           STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION (Unaudited)
                              (Millions of dollars)


<TABLE>
<CAPTION>

                                               July 31    October 31    July 31
                                                2000         1999        1999

                                   ASSETS

<S>                                           <C>          <C>         <C>
Cash and Cash Equivalents..................   $   86.6     $   38.6    $    6.7

Marketable Securities......................      105.3        101.7       104.0

Finance Receivables
  Retail notes.............................      714.8        851.9       489.2
  Lease financing..........................      218.0        187.8       172.6
  Wholesale notes..........................      106.1        528.7       338.9
  Accounts.................................      336.5        507.5       295.1
                                               1,375.4      2,075.9     1,295.8
  Allowance for losses.....................      (11.2)       (13.4)       (9.9)
    Finance Receivables, Net...............    1,364.2      2,062.5     1,285.9

Amounts Due from Sales of Receivables......      335.1        244.5       270.3
Equipment on Operating Leases, Net.........      314.6        266.7       255.3
Repossessions..............................       42.0         21.0        21.0
Other Assets...............................      100.2        114.1        86.6
Total Assets...............................   $2,348.0     $2,849.1    $2,029.8


                    LIABILITIES AND SHAREOWNER'S EQUITY


Short-Term Debt............................   $      -     $   34.5    $   17.9
Net Accounts Payable to Affiliates.........       72.3        706.9        73.1
Other Liabilities..........................       52.7         49.5        48.7
Senior and Subordinated Debt...............    1,806.0      1,675.8     1,505.3
Dealers' Reserves..........................       24.7         24.2        24.9
Unpaid Insurance Claims
  and Unearned Premiums....................       85.8         77.9        77.6

Shareowner's Equity
  Capital stock (Par value $1.00, 1,600,000
    shares issued and outstanding)
    and paid-in capital....................      171.0        171.0       171.0
  Retained Earnings........................      137.8        111.2       111.2
  Accumulated other comprehensive
    (loss) income..........................       (2.3)        (1.9)        0.1
      Total................................      306.5        280.3       282.3
Total Liabilities and Shareowner's Equity..   $2,348.0     $2,849.1    $2,029.8

</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE>


                 NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
                STATEMENTS OF CONSOLIDATED CASH FLOW (Unaudited)
                              (Millions of dollars)
<TABLE>
<CAPTION>
                                                          Nine Months Ended
                                                                July 31
                                                          2000          1999
<S>                                                     <C>           <C>
Cash Flow From Operations
  Net Income..........................................  $   45.6      $   47.2
  Adjustments to reconcile net income to cash
      provided by operations:
    Gains on sales of receivables.....................      (2.5)        (11.5)
    Depreciation and amortization.....................      41.2          34.0
    Provision for losses on receivables...............       6.7           4.5
    Decrease in accounts payable to affiliates........    (634.6)        (63.7)
    Other.............................................       7.2         (16.3)
      Total...........................................    (536.4)         (5.8)

Cash Flow From Investing Activities
  Proceeds from sold retail notes.....................     973.7       1,193.4
  Purchase of retail notes and lease receivables......    (980.4)     (1,026.4)
  Principal collections on retail notes and
    lease receivables.................................      55.6          42.5
  Proceeds from sold wholesale notes..................     358.5           -
  Acquisitions under (over) cash collections of
    wholesale notes and accounts receivable...........     174.0          (8.5)
  Purchase of marketable securities...................     (25.3)        (39.0)
  Proceeds from sales and maturities
    of marketable securities..........................      22.0          43.0
  Purchase of equipment leased to others..............     (69.2)        (80.7)
  Sale of equipment leased to others..................      18.1          11.1
      Total...........................................     527.0         135.4

Cash Flow From Financing Activities
  Net decrease in short-term borrowings...............     (34.5)         (3.9)
  Net increase in bank revolving
    credit facility usage.............................      55.0          40.0
  Net increase (decrease) in asset-backed
    commercial paper facility usage...................      15.0        (117.6)
  Proceeds from long-term debt........................     102.9         108.3
  Principal payments of long-term debt................     (62.0)       (118.8)
  Dividends paid to International.....................     (19.0)        (45.0)
      Total...........................................      57.4        (137.0)

Decrease in Cash and Cash Equivalents.................      48.0          (7.4)

Cash and Cash Equivalents at Beginning of Period......      38.6          14.1

Cash and Cash Equivalents at End of Period............  $   86.6      $    6.7

Supplemental disclosure of cash flow information

  Interest paid.......................................  $   76.8      $   72.4
  Income taxes paid...................................  $   28.8      $   26.7
</TABLE>

See Notes to Consolidated Financial Statements.


<PAGE>




                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   The  consolidated  financial  statements  include the  accounts of Navistar
     Financial  Corporation and its wholly-owned  subsidiaries  ("Corporation").
     Navistar International  Transportation Corp.  ("Transportation"),  which is
     wholly-owned by Navistar  International  Corporation  ("Navistar"),  is the
     parent   company  of  the   Corporation.   Effective   February  23,  2000,
     Transportation   changed  its  name  to  International   Truck  and  Engine
     Corporation ("International").

     The  accompanying  unaudited  financial  statements  have been  prepared in
     accordance with accounting  policies  described in the  Corporation's  1999
     Annual  Report on Form  10-K and  should  be read in  conjunction  with the
     disclosures therein.

     In the opinion of management,  these interim financial  statements  reflect
     all  adjustments,  consisting of normal  recurring  accruals,  necessary to
     present fairly the results of operations, financial condition and cash flow
     for the interim  periods  presented.  Interim  results are not  necessarily
     indicative of results to be expected for the full year.


2.   Finance  receivable  balances  do  not  include  receivables  sold  by  the
     Corporation  to  public  and  private   investors  with  limited   recourse
     provisions. Outstanding sold receivable balances are as follows:

                                          July 31      October 31      July 31
                                           2000           1999          1999
                                                      ($ Millions)

     Retail notes                         $1,975.8      $1,696.0      $1,950.0
     Wholesale notes                         959.3         600.0         600.0
         Total                            $2,935.1      $2,296.0      $2,550.0

     In the first three  quarters of fiscal  2000,  in two separate  sales,  the
     Corporation sold a total of $1,008 million of retail notes, net of unearned
     finance income, through Navistar Financial Retail Receivables  Corporation,
     a wholly owned  subsidiary of the  Corporation.  The Corporation  sold $533
     million of retail notes in November 1999 to two  multi-seller  asset-backed
     commercial  paper conduits  sponsored by a major financial  institution and
     $475  million of retail  notes in March 2000 to an owner  trust  which,  in
     turn,  sold  notes  to  investors.  Aggregate  gains  of  $3  million  were
     recognized on the sales.




<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


     In July 2000, Navistar Financial Securities  Corporation ("NFSC"), a wholly
     owned  subsidiary  of the  Corporation,  issued a $212  million  tranche of
     investor certificates which mature in June 2005.

     In January 2000, NFSC sold $300 million of variable  funding  certificates,
     to a conduit  sponsored by a major  financial  institution.  As of July 31,
     2000, NFSC had $175 million of variable funding  certificates  outstanding,
     and reduced its maximum capacity from $300 million to $200 million.
     The variable funding certificates mature in 2001.

     At July 31, 2000,  NFSC has in place a revolving  wholesale note trust that
     provides for the funding of $959 million of eligible wholesale notes.

     The allowance for losses on receivables is summarized as follows:

                                          July 31      October 31     July 31
                                            2000          1999         1999
                                                      ($ Millions)

     Allowance pertaining to:
         Owned notes                       $11.2         $13.4         $ 9.9
         Sold notes                         15.0          12.8          16.3
             Total                         $26.2         $26.2         $26.2


3.   As of July 31, 2000, the Corporation was a party to a total of $350 million
     of forward starting swaps in anticipation of an October 2000 sale of retail
     receivables.  Any gain or loss will be  included in the gain or loss on the
     sale of receivables recognized in October 2000.

     In November 1999, the Corporation  sold fixed rate retail  receivables on a
     variable  rate basis and entered  into an interest  rate swap  agreement to
     hedge  the  future  cash  flows  of  the  amounts  due  from  the  sale  of
     receivables.  In March 2000, the Corporation transferred all the rights and
     obligations  of the swap to the conduit.  Under the terms of the agreement,
     the  Corporation  will make or receive  payments based on the  differential
     between  the  transferred  swap  notional  amount  and  the  securitization
     transaction  net  outstanding  balance.  The net  settlement is included in
     retail notes revenue.



<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


In  November  1998,  the  Corporation  sold fixed rate retail  receivables  to a
multi-seller   asset-backed  commercial  paper  conduit  sponsored  by  a  major
financial institution on a variable rate basis. For the protection of investors,
the  Corporation  issued an interest  rate cap. The  notional  amount of the cap
amortizes based on the expected outstanding principal balance of the sold retail
receivables.  Under the terms of the cap agreement,  the  Corporation  will make
payments if interest  rates exceed certain  levels.  As of July 31, 2000 the cap
had a notional amount of $253 million and a fair value of $2 million.


4. The Corporation's total comprehensive income was as follows:

                                             Three Months         Nine Months
                                             Ended July 31       Ended July 31
                                             2000     1999       2000     1999
                                                       ($ Millions)

       Net Income ......................... $14.2    $17.7      $45.6    $47.2
       Changes in unrealized losses on
         marketable securities ............   0.1     (1.2)      (0.4)    (1.4)
          Total Comprehensive Income ...... $14.3    $16.5      $45.2    $45.8


5.   On November 1, 2000,  the  Corporation  will adopt  Statement  of Financial
     Accounting  Standards No. 133,  "Accounting for Derivative  Instruments and
     Hedging Activities" as amended. This statement  standardizes the accounting
     for  derivative  instruments  by  requiring  that an entity  recognize  all
     derivatives  as  assets  or  liabilities  in  the  statement  of  financial
     condition and measure them at fair value.  When  certain  criteria are met,
     it also  provides  for  matching  the  gain  or  loss  recognition  on  the
     hedging  instrument  with the  recognition  of (a) the  changes in the fair
     value or  cash flows of the hedged asset or liability  attributable  to the
     hedged  risk  or  (b)   the  earnings  effect  of  the  hedged   forecasted
     transaction.  The Corporation is currently assessing the impact of adoption
     on its financial statements.  Based on the  Corporation's current portfolio
     of instruments subject to the statement,  it is not  expected that adoption
     of  this  statement  will  have  a  material  effect  on the  Corporation's
     results  of  operations,   financial  condition,   or  cash   flows.    The
     Corporation's   initial   assessment,   which  is  subject  to  change  for
     subsequent  events  that  occur  before   adoption,   indicates  that   the
     transition adjustment will be immaterial.



<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
          AND FINANCIAL CONDITION


Certain  statements under this caption,  which involve risks and  uncertainties,
constitute  "forward-looking   statements"  under  the  Securities  Reform  Act.
Navistar Financial  Corporation's  actual results may differ  significantly from
the results  discussed in such  forward-looking  statements.  Factors that might
cause such a difference  include,  but are not limited to, those discussed under
the headings "Year 2000" and "Business Outlook."


Financing Volume

In the first  nine  months  of fiscal  2000  industry  retail  sales for Class 5
through 8 trucks was consistent with 1999. The  Corporation's  retail  financing
acquisitions during the first nine months of fiscal 2000, including retail notes
and finance and operating leases, were $1,050 million, which was also consistent
with 1999. The Corporation's  finance market share of new  International  trucks
sold in the U.S.  was 16.4% and  16.5% in  fiscal  2000 and 1999,  respectively.
Serviced  retail  notes and lease  financing  balances  were $3,223  million and
$2,867 million at July 31, 2000 and 1999, respectively.

In spite of the continued strong liquidity in the commercial  financing  market,
the  Corporation  provided 96% of the wholesale  financing of new trucks sold to
International's  dealers  during the first nine  months of fiscal 2000 and 1999.
Serviced  wholesale  note balances were $1,223  million at July 31, 2000, an 18%
increase compared to July 31, 1999.


Results of Operations

The  components of net income for the three and nine month periods ended July 31
are as follows:

                                             Three Months         Nine Months
                                             Ended July 31       Ended July 31
                                             -------------       -------------
                                             2000     1999       2000     1999

Income before income taxes:
    Finance operations....................  $23.0    $28.0      $71.6    $73.7
    Insurance operations..................    0.1      1.4        2.1      3.3
        Income before taxes...............   23.1     29.4       73.7     77.0
Taxes on income...........................    8.9     11.7       28.1     29.8
        Net income........................  $14.2    $17.7      $45.6    $47.2



<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
          AND FINANCIAL CONDITION (continued)


Results of Operations (continued)

Pre-tax  income was $23 million in the third  quarter of fiscal 2000 compared to
$29 million in 1999.  The decrease was primarily the result of a $6 million gain
on the sale of retail note receivables recognized in June 1999 and higher losses
on retail receivables offset, in part by higher wholesale note revenue.  Pre-tax
income was $74 million in the first nine  months of fiscal 2000  compared to $77
million in 1999.  The decrease was  primarily the result of lower gains on sales
of retail note receivables and higher losses on retail  receivables  offset,  in
part, by higher wholesale note revenue.

Retail note financing  revenue decreased $15 million to $49 million in the first
nine months of 2000  compared to 1999.  The decrease is primarily  the result of
lower  gains on the sale of retail  note  receivables  and a  decrease  in owned
retail  note  balances.  Gains on the sales of retail note  receivables  were $3
million  and $12  million  in the first  nine  months  of fiscal  2000 and 1999,
respectively.  The lower gains  reflect  lower retail note margins and increased
funding rates offered to the Corporation in the asset-backed market.

Lease financing  revenue  increased $13 million to $68 million in the first nine
months of 2000  compared  to 1999.  The  increase  is  primarily  the  result of
continued growth in lease financing.

Wholesale note revenue was $53 million in the first nine months of 2000 compared
to $48 million for the  comparable  period in fiscal 1999 due  primarily  to the
higher  level of  wholesale  financing  activity  and an increase in the average
prime interest rate.

Retail and wholesale account revenue was $34 million in the first nine months of
2000  compared to $26 million in 1999.  The increase was primarily the result of
higher average balances and an increase in the average prime rate.

Servicing  fee income was $23 million in the first nine months of 2000  compared
to $18 million in 1999.  The increase was primarily the result of higher average
sold receivable balances.

Borrowing costs increased $9 million to $78 million during the first nine months
of 2000 primarily as a result of higher average receivable funding  requirements
and higher  average  interest  rates,  partially  offset by the higher  level of
average  outstanding  accounts  payable to affiliates which reduced debt levels.
The higher level of average  outstanding  accounts payable to affiliates reduced
debt levels and resulted in a reduction  in  borrowing  costs of $14 million for
the first nine months of fiscal year 2000. The  Corporation's  weighted  average
interest rate on all debt increased during the first nine months of 2000 to 6.3%
from 5.6% in 1999 primarily due to higher average market interest rates.



<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
          AND FINANCIAL CONDITION (continued)


Results of Operations (continued)

Provision for losses on receivables totaled $7 million for the first nine months
of 2000  compared to $5 million in 1999.  The increase in 2000 was primarily due
to an increase in repossession  frequency and pricing pressure in the used truck
market.  The  Corporation's  allowance  for losses as a  percentage  of serviced
finance  receivables was .55%, .55% and .62% at July 31, 2000,  October 31, 1999
and July 31, 1999, respectively.

Depreciation  and other  expenses  during the first nine  months of 2000 was $39
million  compared to $32 million in the comparable  period of 1999. The increase
is primarily  the result of a larger  investment  in equipment  under  operating
leases.

Insurance Operations:

Harco  National  Insurance  Company's  pretax income in the first nine months of
fiscal 2000 was $1 million lower than 1999. The increase in liability losses was
partially offset by an increase in premiums earned on liability business.


Liquidity and Funds Management

The Corporation  has  traditionally  obtained the funds to provide  financing to
International's  dealers and retail customers from sales of finance receivables,
commercial paper, short and long-term bank borrowings, medium and long-term debt
and equity capital.  The  Corporation's  current debt ratings have made sales of
finance  receivables the most economical  source of funding.  The  Corporation's
insurance  subsidiary generates its funds through internal operations and has no
external borrowings.

In  February  2000,  Standard  and Poors  raised the  Corporation's  senior debt
ratings from BB+ to BBB-, while the  subordinated  debt ratings were also raised
from  BB-  to  BB+.  In May  1999,  Moody's  and  Duff  and  Phelps  raised  the
Corporation's   senior  debt  ratings  from  Ba1  and  BBB-  to  Baa3  and  BBB,
respectively,  while also raising the subordinated debt ratings from Ba3 and BB+
to Ba2 and BBB-, respectively.

Operations  used $536 million in cash in the first nine months of 2000 primarily
as a result of the decrease of $635 million in accounts  payable to  affiliates.
To fund the cash used for operations,  investing and finance activities provided
$584  million in cash during this  period  primarily  as a result of the sale of
retail and wholesale notes and proceeds from long term debt, partially offset by
the purchases of retail notes and lease receivables.





<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
          AND FINANCIAL CONDITION (continued)


Liquidity and Funds Management (continued)

Receivable  sales  were a  significant  source of funding in both 2000 and 1999.
Through the  asset-backed  markets,  the Corporation has been able to fund fixed
rate retail note receivables at rates offered to companies with investment grade
ratings.  In the first three quarters of fiscal 2000, in two separate sales, the
Corporation  sold a total of $1,008  million of retail  notes,  net of  unearned
finance income,  through Navistar  Financial Retail Receivables  Corporation,  a
wholly owned subsidiary of the Corporation. The Corporation sold $533 million of
retail notes in November 1999 to two multi-seller  asset-backed commercial paper
conduits  sponsored by a major financial  institution and $475 million of retail
notes in March 2000 to an owner trust which,  in turn,  sold notes to investors.
Aggregate gains of $3 million were recognized on the sales. As of July 31, 2000,
the remaining shelf  registration  available to NFRRC for the public issuance of
asset-backed securities was $1,783 million.

In July 2000, Navistar Financial Securities Corporation ("NFSC"), a wholly owned
subsidiary  of the  Corporation,  issued  a $212  million  tranche  of  investor
certificates which mature in June 2005.

In January 2000, NFSC sold $300 million of variable funding  certificates,  to a
conduit  sponsored by a major financial  institution.  As of July 31, 2000, NFSC
had $175 million of variable funding certificates  outstanding,  and reduced its
maximum  capacity  from $300  million  to $200  million.  The  variable  funding
certificates mature in 2001.

At July 31,  2000,  NFSC has in place a  revolving  wholesale  note  trust  that
provides for the funding of $959 million of eligible wholesale notes.

At July 31, 2000, available funding under the bank revolving credit facility and
the asset-backed  commercial paper facility was $33 million.  When combined with
unrestricted cash and cash  equivalents,  $120 million was available to fund the
general business purposes of the Corporation.

As of July 31, 2000, the  Corporation  was a party to a total of $350 million of
forward  starting swaps in  anticipation  of an October 2000 sale of retail note
receivables.  Any gain or loss will be  included in the gain or loss on the sale
of receivables recognized in October 2000.




<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
          AND FINANCIAL CONDITION (continued)


Liquidity and Funds Management (continued)

In  November  1999,  the  Corporation  sold fixed rate retail  receivables  on a
variable  rate basis and entered into an interest  rate swap  agreement to hedge
the future cash flows of the amounts due from the sale of receivables.  In March
2000, the Corporation  transferred all the rights and obligations of the swap to
the conduit.  Under the terms of the  agreement,  the  Corporation  will make or
receive payments based on the differential between the transferred swap notional
amount and the  securitization  transaction  net  outstanding  balance.  The net
settlement is included in retail notes revenue.

In  November  1998,  the  Corporation  sold fixed rate retail  receivables  to a
multi-seller   asset-backed  commercial  paper  conduit  sponsored  by  a  major
financial institution on a variable rate basis. For the protection of investors,
the  Corporation  issued an interest  rate cap. The  notional  amount of the cap
amortizes based on the expected outstanding principal balance of the sold retail
receivables.  Under the terms of the cap agreement,  the  Corporation  will make
payments if interest  rates exceed certain  levels.  As of July 31, 2000 the cap
had a notional amount of $253 million and a fair value of $2 million.


Year 2000

As  described  in the 1999  Annual  Report on Form  10-K,  the  Corporation  had
instituted  a  corporate-wide  Year  2000  readiness  project  to  identify  all
significant  information  technology  ("IT")  applications  which would  require
modification  or  replacement,  and to  establish  appropriate  remediation  and
contingency  plans to avoid an impact on the  company's  ability to  continue to
provide its products and services.  Through the date of this report, the company
has not  experienced  any  significant  Year 2000  problems but will continue to
monitor its critical  systems over the next  several  months.  In the event that
significant issues arise, the company's contingency plans remain in place.

Total costs connected with the remediation of the  Corporation's  significant IT
systems  totaled $2 million in 1999,  $3 million in 1998 and $1 million in 1997.
Costs  in the  first  nine  months  of  fiscal  year  2000  were  not  material.
Approximately  25% of the total costs,  representing  investment in purchased IT
systems,  were capitalized and will be depreciated over three to five years. The
total  cost of the  Year  2000  project  has not had a  material  impact  on the
Corporation's  financial  position or results of operations  and has been funded
through operating cash flows.



<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
          AND FINANCIAL CONDITION (continued)


New Accounting Pronouncements

On  November  1,  2000,  the  Corporation  will  adopt  Statement  of  Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities"  as  amended.   This  statement   standardizes  the  accounting  for
derivative  instruments by requiring that an entity recognize all derivatives as
assets or liabilities in the statement of  financial condition  and measure them
at fair value.  When certain criteria are met, it also provides for matching the
gain or loss  recognition on the hedging  instrument with the recognition of (a)
the  changes in the fair value or cash  flows of the hedged  asset or  liability
attributable  to the  hedged  risk  or (b) the  earnings  effect  of the  hedged
forecasted  transaction.  The  Corporation is currently  assessing the impact of
adoption  on  its  financial  statements.  Based  on the  Corporation's  current
portfolio of  instruments  subject to the  statement,  it is not  expected  that
adoption  of this  statement  will have a material  effect on the  Corporation's
results of operations,  financial  condition,  or cash flows. The  Corporation's
initial assessment,  which is subject to change for subsequent events that occur
before adoption, indicates that the transition adjustment will be immaterial.


Business Outlook

The truck  industry in 2000 is  forecasted  to decrease  approximately  13% from
1999. The competitive  commercial financing market will continue to put pressure
on the  Corporation's  retail and  wholesale  financing  activity  and  margins.
Increased volatility in the capital markets is likely to put additional pressure
on the funding  rates  offered to the  Corporation  in the  asset-backed  public
market, commercial paper markets and other debt financing markets. Additionally,
high fuel costs may impact the financial strength of the Corporation's customers
and the  Corporation's  ability  to  maintain  the  current  level of  portfolio
quality.

Management  believes that collections on the outstanding  receivables  portfolio
plus cash available from the  Corporation's  various funding sources will permit
Navistar   Financial   Corporation  to  meet  the  financing   requirements   of
International's dealers and retail customers through 2000 and beyond.


<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES


                           PART II - OTHER INFORMATION


Item 6.        Exhibits and Reports on Form 8-K

               No reports on Form 8-K were filed  during the nine months
               ended July 31, 2000.



                                    SIGNATURE


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                             Navistar Financial Corporation
                                                     (Registrant)






Date September 14, 2000                      /s/R. D. Markle
                                                R. D. Markle
                                                Vice President and Controller
                                                (Principal Accounting Officer)