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 April 30, 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 May 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 Six Months Ended April 30, 2000 and 1999........  2

           Statements of Consolidated Financial Condition --
           April 30, 2000; October 31, 1999; and April 30, 1999.............  3

           Statements of Consolidated Cash Flow --
           Six Months Ended April 30, 2000 and 1999.........................  4

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

 Item 2.   Management's Discussion and Analysis of Financial
           Condition and Results of Operations..............................  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   Six Months Ended
                                                April 30            April 30
                                             ------   ------    ------   ------
                                              2000     1999       2000    1999
                                             ------   ------    ------   ------
<S>                                          <C>      <C>       <C>      <C>
Revenue
  Retail note financing..................... $ 15.2   $ 19.0    $ 31.6   $ 41.1
  Lease financing...........................   22.6     18.3      44.8     35.7
  Wholesale notes...........................   16.6     16.3      35.6     31.0
  Accounts..................................   12.1      9.2      23.4     17.5
  Servicing fee income......................    7.6      5.5      14.5     11.7
  Insurance premiums earned.................   11.1      8.5      21.6     17.0
  Marketable securities.....................    1.9      2.4       3.7      4.4
                                             ------   ------    ------   ------
    Total...................................   87.1     79.2     175.2    158.4
                                             ------   ------    ------   ------

Expense
  Cost of borrowing:
    Interest................................   23.0     21.5      47.0     43.7
    Other...................................    1.4      1.5       2.9      3.2
                                             ------   ------    ------   ------
      Total.................................   24.4     23.0      49.9     46.9
                                             ------   ------    ------   ------

  Credit, collection and administrative.....    11.7    10.7      22.6     20.8
  Provision for losses on receivables.......     2.3     1.9       3.7      3.2
  Insurance claims and underwriting.........    12.6     9.1      23.1     19.4
  Depreciation expense and other............    12.9    10.6      25.3     20.5
                                              ------  ------    ------   ------
     Total..................................    63.9    55.3     124.6    110.8
                                              ------  ------    ------   ------

Income Before Taxes on Income...............    23.2    23.9      50.6     47.6

Taxes on Income.............................     9.0     8.9      19.2     18.1
                                              ------  ------    ------   ------

Net Income                                      14.2    15.0      31.4     29.5

Retained Earnings

  Beginning of period.......................   121.4   111.5     111.2    109.0

  Dividends paid............................    (6.0)  (13.0)    (13.0)   (25.0)
                                              ------  ------    ------   ------

  End of period.............................  $129.6  $113.5    $129.6   $113.5
                                              ======  ======    ======   ======
</TABLE>

   See Notes to Consolidated Financial Statements.


<PAGE>






                 NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
           STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION (Unaudited)
                              (Millions of dollars)
<TABLE>
<CAPTION>
                                          April 30     October 31     April 30
                                            2000         1999           1999
                                         ----------    -----------   ----------
ASSETS
<S>                                       <C>           <C>          <C>
Cash and Cash Equivalents................ $   30.0      $   38.6     $   13.0

Marketable Securities....................    105.4         101.7        103.5

Finance Receivables
  Retail note financing..................    342.6         851.9        865.6
  Lease financing........................    205.5         187.8        159.5
  Wholesale notes........................    299.9         528.7        452.7
  Accounts...............................    503.9         507.5        471.6
                                          --------      --------     --------
                                           1,351.9       2,075.9      1,949.4
  Allowance for losses...................     (9.4)        (13.4)       (13.5)
                                          --------      --------     --------
    Finance Receivables, Net.............  1,342.5       2,062.5      1,935.9

Amounts Due from Sales of Receivables....    336.4         244.5        237.8
Equipment on Operating Leases, Net.......    268.1         266.7        236.0
Repossessions............................     41.5          21.0         19.6
Other Assets.............................     72.4         114.1        105.6
                                          ---------     --------     --------
Total Assets............................. $2,196.3      $2,849.1     $2,651.4
                                          =========     ========     ========

LIABILITIES AND SHAREOWNER'S EQUITY

Short-Term Debt.......................... $      -      $   34.5     $   15.0
Net Accounts Payable to Affiliates.......    249.4         706.9        564.9
Other Liabilities........................     48.4          49.5         51.9
Senior and Subordinated Debt.............  1,497.4       1,675.8      1,631.2
Dealers' Reserves........................     23.2          24.2         24.4
Unpaid Insurance Claims
  and Unearned Premiums..................     79.7          77.9         78.2

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......................    129.6         111.2        113.5
  Accumulated other comprehensive
    (loss) income........................     (2.4)         (1.9)         1.3
                                          --------      --------     --------
    Total................................    298.2         280.3        285.8
                                          --------      --------     --------
Total Liabilities and
  Shareowner's Equity.................... $2,196.3      $2,849.1     $2,651.4
                                          ========      ========     ========
</TABLE>


See Notes to Consolidated Financial Statements.


<PAGE>





                 NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
                STATEMENTS OF CONSOLIDATED CASH FLOW (Unaudited)
                              (Millions of dollars)
<TABLE>
<CAPTION>
                                                             Six Months Ended
                                                                 April 30
                                                           --------------------
                                                             2000        1999
                                                           --------    --------
<S>                                                       <C>         <C>
Cash Flow From Operations
  Net income............................................. $  31.4     $  29.5
  Adjustments to reconcile net income to cash
      provided by operations:
    Gains on sales of receivables........................    (2.5)       (5.7)
    Depreciation and amortization........................    27.0        22.0
    Provision for losses on receivables..................     3.7         3.2
    (Decrease) increase in accounts payable
      to affiliates......................................  (457.5)      428.1
    Other................................................    (0.3)      (13.0)
                                                          -------     -------
      Total..............................................  (398.2)      464.1
                                                          -------     -------

Cash Flow From Investing Activities
  Proceeds from sold retail notes........................   960.0       511.6
  Purchase of retail notes and lease receivables.........  (579.8)     (662.2)
  Principal collections on retail notes and
    lease receivables....................................    40.9        31.5
  Proceeds from sold wholesale notes.....................   300.0           -
  Acquisitions over cash collections of wholesale
    notes and accounts receivable........................  (115.0)     (299.1)
  Purchase of marketable securities......................   (17.5)      (20.7)
  Proceeds from sales and maturities
    of marketable securities.............................    13.7        26.1
  Purchase of equipment leased to others.................   (38.5)      (46.6)
  Sale of equipment leased to others.....................    11.5         7.7
                                                          -------     -------
    Total................................................   575.3      (451.7)
                                                          -------     -------

Cash Flow From Financing Activities
  Net decrease in short term borrowings..................   (34.5)       (6.8)
  Net increase in bank revolving credit facility usage...    55.0        40.0
  Net (decrease) increase in asset-backed commercial
    paper facility usage.................................  (229.8)       11.3
  Proceeds from long-term debt...........................    76.3        73.3
  Principal payments of long-term debt...................   (39.7)     (106.3)
  Dividends paid to International........................   (13.0)      (25.0)
                                                          -------     -------
    Total................................................  (185.7)      (13.5)
                                                          -------     -------

Decrease in Cash and Cash Equivalents....................    (8.6)       (1.1)

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

Cash and Cash Equivalents at End of Period............... $  30.0     $  13.0
                                                          =======     =======

Supplemental disclosure of cash flow information
  Interest paid.......................................... $  49.0     $  49.4
                                                          =======     =======
  Income taxes paid...................................... $  20.4     $  15.3
                                                          =======     =======
</TABLE>


See Notes to Consolidated 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:

                                            April 30    October 31    April 30
                                              2000         1999         1999
                                                       ($ Millions)

     Retail notes.......................    $2,223.7     $1,696.0     $1,493.4
     Wholesale notes....................       900.0        600.0        600.0
                                            --------     --------     --------
           Total........................    $3,123.7     $2,296.0     $2,093.4
                                            ========     ========     ========


     In November 1999, the Corporation sold $533 million of retail notes, net of
     unearned  finance income,  through Navistar  Financial  Retail  Receivables
     Corporation ("NFRRC"), a wholly owned subsidiary of the Corporation, to two
     multi-seller  asset-backed  commercial paper conduits  sponsored by a major
     financial institution. A gain of $2.2 million was recognized on the sale.

     In January  2000,  the  Corporation  sold $300 million of variable  funding
     certificates, through Navistar Financial Securities Corporation ("NFSC"), a
     wholly owned  subsidiary of the  Corporation,  to a conduit  sponsored by a
     major financial  institution.  The variable funding  certificates mature in
     2001. At April 30, 2000, NFSC has in place a revolving wholesale note trust
     that provides for the funding of $900 million of eligible wholesale notes.


<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


     In March 2000, the  Corporation  sold $475 million of retail notes,  net of
     unearned  finance  income,  through NFRRC to an owner trust which, in turn,
     sold notes to investors. A gain of $0.3 million was recognized on the sale.

     The allowance for losses on receivables is summarized as follows:

                                            April 30    October 31    April 30
                                              2000         1999         1999
                                                       ($ Millions)
     Allowance pertaining to:
        Owned notes.....................     $ 9.4        $13.4        $13.5
        Sold notes......................      16.8         12.8         12.7
                                             -----        -----        -----
              Total.....................     $26.2        $26.2        $26.2
                                             =====        =====        =====


3.   As of April 30, 2000, the Corporation  entered into a total of $250 million
     of forward  treasury  locks and $50  million of forward  starting  swaps in
     anticipation  of a July 2000 sale of retail  receivables.  Any gain or loss
     will be included in the gain or loss on the sale of receivables  recognized
     in July 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 note financing 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 April 30, 2000 the cap had a notional  amount of $295 million and a fair
     value of $2.3 million.


<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


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

                                              Three Months        Six Months
                                             Ended April 30     Ended April 30
                                             --------------     --------------
                                             2000      1999     2000      1999
                                             ----      ----     ----      ----
                                                        ($ Millions)

     Net Income............................ $14.2     $15.0    $31.4     $29.5
     Changes in unrealized gains
       (losses) on marketable securities...   1.3       0.0     (0.5)     (0.2)
                                            -----     -----    -----     -----
       Total Comprehensive Income.......... $15.5     $15.0    $30.9     $29.3
                                            =====     =====    =====     =====




<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

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


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 half of fiscal  2000  industry  retail  sales for Class 5 through 8
trucks was  approximately  3.0%  higher  than  1999.  The  Corporation's  retail
financing  acquisitions  during the first six months of fiscal  2000,  including
retail notes and finance and operating leases, were $618 million, 13% lower than
1999. The decrease resulted  primarily from the continuing,  highly  competitive
commercial  financing  market,  which  led to a  decrease  in the  Corporation's
finance market share of new International  trucks sold in the U.S. from 15.1% in
1999 to 12.9% in fiscal 2000. Serviced retail notes and lease financing balances
were $3,040 million and $2,755 million at April 30, 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 in the first quarter of fiscal 2000 and 1999.  Serviced
wholesale  note balances  were $1,344  million at April 30, 2000, a 17% increase
compared to April 30, 1999 due to the strong industry demand.


Results of Operations

The  components of net income for the three and six month periods ended April 30
are as follows:

                                              Three Months        Six Months
                                             Ended April 30     Ended April 30
                                             --------------     --------------
                                             2000      1999     2000      1999
                                             ----      ----     ----      ----
Income before income taxes:
    Finance operations....................  $23.1     $22.1    $48.6     $45.7
    Insurance operations..................    0.1       1.8      2.0       1.9
                                            -----     -----    -----     -----
    Income before taxes...................   23.2      23.9     50.6      47.6
    Taxes on income.......................    9.0       8.9     19.2      18.1
                                            -----     -----    -----     -----
        Net income........................  $14.2     $15.0    $31.4     $29.5
                                            =====     =====    =====     =====




<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

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


Results of Operations (continued)

Finance Operations:

During the second quarter of fiscal 2000, the Corporation's pretax income of $23
million  was $1 million  lower  than the  corresponding  period of fiscal  1999.
Pretax  income  during the first six months of 2000  increased $3 million to $51
million  compared to the same period of 1999. The decrease in the second quarter
is  primarily  due to lower owned retail note  balances  and margins,  partially
offset by higher  wholesale note  balances.  The  improvement  for the first six
months  was due  primarily  to a higher  level of average  outstanding  accounts
payable to  affiliates  which  proportionately  lowered debt levels and interest
expense.  This was  offset,  in part,  by lower gains on the sale of retail note
receivables and the competitive  commercial  financing market which continued to
put pressure on retail and wholesale finance margins.

Retail note financing  revenue  decreased $9 million to $32 million in the first
half of 2000  compared  to 1999.  The  decrease  is  primarily  the  result of a
decrease in owned  retail note  balances and margins and lower gains on the sale
of retail note receivables. Gains on the sale of retail note receivables were $3
million and $6 million in the first half of fiscal 2000 and 1999,  respectively.
The lower gains reflects  lower retail note margins and increased  funding rates
offered to the Corporation in the asset-backed market.

Lease financing revenue increased $9 million to $45 million in the first half of
2000 compared to 1999. The increase is primarily the result of continued  growth
in lease financing.

Wholesale  note  revenue  increased  to $36  million  in the first  half of 2000
compared to $31 million in fiscal 1999 due  primarily  as a result of the higher
level of wholesale financing activity and an increase in the average prime rate.

Retail and wholesale  account  revenue was $23 million in the first half of 2000
compared to $18 million in 1999. The increase was primarily the result of higher
average balances and an increase in the average prime rate.

Service  fee income was $15  million in the first half of 2000  compared  to $12
million in 1999.  The increase was primarily  the result of higher  average sold
balances.




<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

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


Results of Operations (continued)

Finance Operations (continued):

Borrowing  costs  increased  $3 million to $50 million  during the first half of
2000 due primarily to higher average receivable funding  requirements and higher
average  interest  rates,  partially  offset  by the  higher  level  of  average
outstanding  accounts  payable  to  affiliates.  The  higher  level  of  average
outstanding accounts payable to affiliates reduced debt levels and resulted in a
reduction  in  borrowing  costs of $6 million  for the first half of fiscal year
2000. The  Corporation's  weighted  average  interest rate on all debt increased
during  the first six months of 2000 to 6.2% from 5.6% in the first half of 1999
primarily due to higher average market interest rates.

Provision for losses on  receivables  totaled $4 million in the first six months
of 2000 compared with $3 million in 1999. The increase in 2000 was primarily due
to the  increase in serviced  finance  receivable  balances.  The  Corporation's
allowance for losses as a percentage of serviced  finance  receivables was .54%,
 .55%  and .60% at  April  30,  2000,  October  31,  1999  and  April  30,  1999,
respectively.

Depreciation  and other  expenses  during  the first six  months of 2000 was $25
million  compared to $21 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 half of fiscal
2000 was  comparable to the same period in fiscal 1999. The increase on premiums
earned on liability business was offset by an increase in liability losses.


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.


<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

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


Liquidity and Funds Management (continued)


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 $398  million in cash in the first half of 2000  primarily as a
result of the decrease of $458  million in accounts  payable to  affiliates.  To
fund the cash used for operations, investing activities provided $575 million in
cash  during  this  period  primarily  as a  result  of the sale of  retail  and
wholesale  notes,  partially  offset by the  purchases  of retail note and lease
receivables. The excess cash generated by investing activities was used to lower
borrowings in the asset-backed commercial paper facility and to pay dividends of
$13 million.

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.  During the first half of fiscal  2000,  the  Corporation  sold  $1,008
million of retail  notes,  net of  unearned  finance  income,  through  Navistar
Financial Retail Receivables  Corporation  ("NFRRC"), a wholly owned subsidiary.
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, issued securities which were sold to investors. During the
first half of fiscal 1999,  the  Corporation  sold $545 million of retail notes,
net of unearned  finance  income,  through NFRRC to a multi-seller  asset-backed
commercial paper conduit  sponsored by a major financial  institution.  At April
30, 2000,  the remaining  shelf  registration  available to NFRRC for the public
issuance of asset-backed securities was $1,783 million.

In  January  2000,  the  Corporation  sold  $300  million  of  variable  funding
certificates,  through Navistar Financial  Securities  Corporation  ("NFSC"),  a
wholly owned  subsidiary of the Corporation,  to a conduit  sponsored by a major
financial  institution.  The variable  funding  certificates  mature in 2001. At
April 30, 2000, NFSC had a revolving  wholesale note trust that provides for the
funding of $900 million of eligible wholesale notes.


<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

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


Liquidity and Funds Management (continued)

At April 30, 2000,  available  funding under the bank revolving  credit facility
and the asset-backed  commercial paper facility was $302 million.  When combined
with unrestricted cash and cash equivalents,  $332 million was available to fund
the general business purposes of the Corporation.

As of April 30, 2000,  the  Corporation  entered into a total of $250 million of
forward treasury locks and $50 million of forward starting swaps in anticipation
of a July 2000 sale of retail receivables.  Any gain or loss will be included in
the gain or loss on the sale of receivables recognized in July 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 note financing revenue.

In  November  1998,  the  Corporation  sold fixed rate retail  receivables  on a
variable rate basis. For the protection of investors,  the Corporation issued an
interest rate cap. Under the terms of the agreement,  the Corporation  will make
payments if interest rates exceed certain levels. The notional amount of the cap
amortizes based on the expected outstanding principal balance of the sold retail
receivables.  As of April 30, 2000 the notional  amount was $295 million and the
interest rate cap had 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.


<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

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


Year 2000 (continued)

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 half 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.


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,
rising  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 six months  ended
          April 30, 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 June 13, 2000                      /s/R. D. Markle
     -------------                       ---------------------------------
                                           R. D. Markle
                                           Vice President and Controller
                                           (Principal Accounting Officer)