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 January 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 February 29, 2000, the number of shares  outstanding  of the  registrant's
common stock was 1,600,000.

THE   REGISTRANT  IS  A  WHOLLY-OWNED   SUBSIDIARY  OF  NAVISTAR   INTERNATIONAL
TRANSPORTATION  CORP. 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 Ended January 31, 2000 and 1999. . . . . . . . . .  2

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

      Statements of Consolidated Cash Flow --
        Three Months Ended January 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 . . . . . . . . . . . . . 13

Signature   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13






<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
                                                                January 31
                                                          ---------------------
                                                           2000           1999
                                                           ----           ----
<S>                                                      <C>            <C>
Revenue
    Retail note financing.............................   $ 16.4         $ 22.1
    Lease financing...................................     22.2           17.4
    Wholesale notes...................................     19.0           14.7
    Accounts..........................................     11.3            8.3
    Servicing fee income..............................      6.9            6.2
    Insurance premiums earned.........................     10.5            8.5
    Marketable securities.............................      1.8            2.0
                                                         ------         ------
           Total......................................     88.1           79.2
                                                         ------         ------

Expense
    Cost of borrowing:
        Interest expense..............................     24.0           22.2
        Other.........................................      1.5            1.7
                                                         ------         ------
           Total......................................     25.5           23.9

    Credit, collection and administrative.............     10.9           10.1
    Provision for losses on receivables...............      1.4            1.3
    Insurance claims and underwriting.................     10.5           10.3
    Depreciation expense and other....................     12.4            9.9
                                                         ------         ------
           Total.......................................    60.7           55.5
                                                         ------         ------

Income Before Taxes on Income..........................    27.4           23.7

Taxes on Income........................................    10.2            9.2
                                                         ------          -----

Net Income.............................................    17.2           14.5

Retained Earnings

    Beginning of period................................   111.2          109.0

    Dividends paid.....................................    (7.0)         (12.0)
                                                         ------         ------

    End of period......................................  $121.4         $111.5
                                                         ======         ======
</TABLE>



See Notes to Consolidated Financial Statements.


<PAGE>



                 NAVISTAR FINANCIAL CORPORATION AND SUBSIDIARIES
           STATEMENTS OF CONSOLIDATED FINANCIAL CONDITION (Unaudited)
                              (Millions of dollars)
<TABLE>
<CAPTION>

                                            January 31   October 31   January 31
                                                2000        1999          1999
                                            ----------   ----------   ----------
                                ASSETS
<S>                                         <C>           <C>          <C>
Cash and Cash Equivalents.................. $   16.4      $   38.6     $    9.8

Marketable Securities......................    143.0         101.7        104.8

Finance Receivables
    Retail note financing..................    546.0         851.9        532.3
    Lease financing........................    192.8         187.8        149.2
    Wholesale notes........................    223.0         528.7        355.5
    Accounts...............................    528.1         507.5        396.8
                                            --------      --------     --------
                                             1,489.9       2,075.9      1,433.8
    Allowance for losses...................    (11.1)        (13.4)       (11.1)
                                            --------      --------     --------
        Finance Receivables, Net...........  1,478.8       2,062.5      1,422.7

Amounts Due from Sales of Receivables......    328.4         244.5        266.6
Equipment on Operating Leases, Net.........    267.1         266.7        230.9
Repossessions..............................     24.7          21.0         17.7
Other Assets...............................     93.5         114.1         88.4
                                            --------      --------     --------
Total Assets............................... $2,351.9      $2,849.1     $2,140.9
                                            ========      ========     ========

                  LIABILITIES AND SHAREOWNER'S EQUITY

Short-Term Borrowings...................... $   25.0      $   34.5     $   14.9
Net Accounts Payable to Affiliates.........    204.3         706.9        212.3
Other Liabilities..........................     54.4          49.5         54.7
Senior and Subordinated Debt...............  1,680.3       1,675.8      1,470.7
Dealers' Reserves..........................     24.4          24.2         24.6
Unpaid Insurance Claims and
  Unearned Premiums........................     74.8          77.9         79.9

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......................    121.4         111.2        111.5
Accumulated other comprehensive
  (loss) income............................     (3.7)         (1.9)         1.3
                                            --------      --------     --------
        Total..............................    288.7         280.3        283.8
                                             -------      --------     --------
Total Liabilities and Shareowner's Equity.. $2,351.9      $2,849.1     $2,140.9
                                            ========      ========     ========
</TABLE>



See Notes to Consolidated Financial Statements.


<PAGE>


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

<TABLE>
<CAPTION>
                                                         Three Months Ended
                                                             January 31
                                                     ---------------------------
                                                        2000             1999
                                                     -----------    ------------
<S>                                                  <C>              <C>
Cash Flow From Operations
    Net income...................................... $  17.2          $  14.5
    Adjustments to reconcile net income to cash
        Provided by operations:
        Gains on sales of receivables...............    (2.2)            (5.7)
        Depreciation and amortization...............    13.4             10.8
        Provision for losses on receivables.........     1.4              1.3
        (Decrease) increase in accounts payable
           to affiliates............................  (502.6)            75.5
        Other.......................................     4.5             (5.1)
                                                     -------          -------
           Total....................................  (468.3)            91.3
                                                     -------          -------

Cash Flow From Investing Activities
    Proceeds from sold retail notes.................   496.1            518.5
    Purchase of retail notes and lease receivables..  (263.3)          (315.6)
    Principal collections on retail notes and
        lease receivables...........................    26.3              0.4
    Proceeds from sold wholesale notes..............   300.0                -
    Acquisitions over cash collections of wholesale
        notes and accounts receivable...............   (62.6)          (134.6)
    Purchase of marketable securities...............   (52.3)            (8.5)
    Proceeds from sales and maturities
        of marketable securities....................     8.4             11.7
    Purchase of equipment leased to others..........   (18.8)           (24.3)
    Sale of equipment leased to others..............     5.7              1.1
                                                     -------          -------
        Total.......................................   439.5             48.7
                                                     -------          -------

Cash Flow From Financing Activities
    Net decrease in short term borrowings...........    (9.5)            (6.8)
    Net increase in bank revolving credit
        facility usage..............................    85.0                -
    Net decrease in asset-backed commercial paper
        facility usage..............................   (79.6)           (78.8)
    Proceeds from long-term debt....................    41.4             48.5
    Principal payments of long-term debt............   (23.7)           (95.2)
    Dividends paid to Transportation................    (7.0)           (12.0)
                                                     -------          -------
        Total.......................................     6.6           (144.3)
                                                     -------          -------

Decrease in Cash and Cash Equivalents...............   (22.2)            (4.3)

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

Cash and Cash Equivalents at End of Period.......... $  16.4          $   9.8
                                                     =======          =======

Supplemental disclosure of cash flow information
    Interest paid................................... $  28.2          $  29.8
                                                     =======          =======
    Income taxes paid............................... $   1.8          $   2.4
                                                     =======          =======
</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   ("NFC")   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.

      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.
      Certain  1999  amounts  have  been   reclassified   to  conform  with  the
      presentation used in the 2000 financial statements.

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

                                    January 31    October 31    January 31
                                       2000          1999         1999
                                    ----------    ----------    ----------
                                                 ($ Millions)

       Retail notes...............  $1,986.5       $1,696.0      $1,757.2
       Wholesale notes............     900.0          600.0         639.5
                                    --------       --------      --------
          Total...................  $2,886.5       $2,296.0      $2,396.7
                                    ========       ========      ========

      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, a wholly
      owned  subsidiary of the  Corporation,  to a conduit  sponsored by a major
      financial  institution.   The  variable  funding  certificates  mature  in
      2001.




<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:

                                       January 31    October 31    January 31
                                         2000           1999          1999
                                       ----------    ----------    ----------
                                                    ($ Millions)
    Allowance pertaining to:
       Owned notes. . . . . . . . . .    $11.1         $13.4          $11.1
       Sold notes . . . . . . . . . .     15.1          12.8           15.1
                                         -----         -----          -----
           Total. . . . . . . . . . .    $26.2         $26.2          $26.2
                                         =====         =====          =====

3.     As of January 31, 2000,  the  Corporation  was a party to a total of $400
       million of forward  treasury  locks and $75  million of forward  starting
       swaps related to the anticipated  March 2000 sale of retail  receivables.
       The  Corporation  closed these  positions and the resulting  $0.8 million
       gain was included in the gain on the sale of  receivables  recognized  in
       March 2000.

       In the second  quarter of fiscal  2000,  the  Corporation  entered into a
       total of $200 million of forward treasury locks 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.  Under the terms of the agreement, the Corporation will make
       or  receive  payments  based  on  changes  in  interest  rates.  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 January 31, 2000 the cap had a notional amount of
       $349 million and a fair value of $2.5 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 Ended January 31
                                                   2000                   1999
                                                   ----------------------------
                                                           ($ Millions)

       Net Income. . . . . . . . . . . . . . .    $17.2                  $14.5
       Changes in unrealized gains/(losses) on
         marketable securities . . . . . . . .     (1.8)                  (0.2)
                                                  -----                  -----
          Total Comprehensive Income . . . . .    $15.4                  $14.3
                                                  =====                  =====



<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 quarter of fiscal 2000 industry  retail sales for Class 5 through 8
trucks  were  approximately  8%  higher  than  1999.  The  Corporation's  retail
financing  acquisitions in fiscal 2000,  including  retail notes and finance and
operating  leases,  were  $282.1  million,  17% 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  16.3% in 1999 to 12.3% in  fiscal
2000. Serviced retail notes and lease financing balances were $2,993 million and
$2,670 million at January 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
Transportation's  dealers in the first quarter of fiscal 2000 and 1999. Serviced
wholesale  note balances were $1,267 million at January 31, 2000, a 15% increase
compared to the same period of 1999.


Results of Operations

The  components  of net  income  for the three  months  ended  January 31 are as
follows:

                                                           2000          1999
                                                           ----          ----
Income before income taxes:
    Finance operations.................................   $25.5          $23.6
    Insurance operations...............................     1.9            0.1
                                                          -----          -----
        Income before taxes............................    27.4           23.7
    Taxes on income....................................    10.2            9.2
                                                          -----          -----
        Net income.....................................   $17.2          $14.5
                                                          =====          =====

Pretax income was $27.4 million and $23.7 million in the first quarter of fiscal
2000 and 1999, respectively. The improvement was due primarily to a higher level
of average  outstanding  accounts  payable to affiliates  which  proportionately
lowered debt levels and interest expense and higher finance receivable balances.
This was offset, in part, by a lower gain on the sale of retail note receivables
and the competitive  commercial financing market which continued to put pressure
on retail and wholesale finance margins.



<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)

Finance Operations:

Retail note  financing  revenue was $16.4  million in the first  quarter of 2000
compared to $22.1  million in 1999.  The decrease is  primarily  the result of a
lower gain on the sale of retail note receivables  and  lower margins.  Gains on
the sale of retail note  receivables were $2.2 million  and $5.7  million in the
first quarter of fiscal 2000 and 1999,  respectively.   The lower gain  reflects
lower retail note margins and increased funding rates offered to the Corporation
in the asset-backed market.

Lease financing  revenue was $22.2 million in the first quarter of 2000 compared
to $17.4  million in 1999.  The  increase is  primarily  the result of continued
growth in lease financing.

Wholesale  note  revenue was $19.0  million in the first  quarter of fiscal 2000
compared to $14.7  million in 1999.  The  increase is  primarily a result of the
higher  level of  wholesale  financing  activity  and an increase in the average
prime rate.

Retail and wholesale  account  revenue was $11.3 million in the first quarter of
2000  compared to $8.3  million in fiscal 1999.  The  increase is primarily  the
result of higher average balances and an increase in the average prime rate.

Borrowing costs increased $1.6 million to $25.5 million during the first quarter
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 $7.3  million for the first  quarter of fiscal
year  2000.  The  Corporation's  weighted  average  interest  rate  on all  debt
increased to 6.2% in 2000 from 5.9% in the first  quarter of 1999  primarily due
to higher market interest rates.

Depreciation and other expenses  increased to $12.4 million in the first quarter
of 2000 from $9.9  million in 1999.  The  increase  is  primarily  the result of
depreciation on a larger investment in equipment under operating leases.

Insurance Operations:

Harco National Insurance  Company's pretax income in the first quarter of fiscal
2000 was $1.8  million  higher than 1999  primarily  due to  increased  premiums
earned in liability  lines and  favorable  loss  experience in both the physical
damage and liability lines.


<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

The Corporation  has  traditionally  obtained the funds to provide  financing to
Transportation'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 $468.3 million in cash in the first quarter of 2000 primarily as
a result of the decrease of $502.6 million in accounts payable to affiliate.  To
fund the cash used for operations,  investing activities provided $439.5 million
in cash  during  this  period  primarily  as a result of the sale of retail  and
wholesale notes,  offset by the purchases of retail note and lease  receivables.
Financing  activities,  excluding  dividends  of $7.0  million,  provided  $13.6
million.

Receivable  sales were a  significant  source of funding in the first quarter of
fiscal 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 quarter of fiscal 2000,  the
Corporation  sold $533 million of retail notes,  net of unearned finance income,
through Navistar Financial Retail Receivables  Corporation  ("NFRRC"),  a wholly
owned  subsidiary,  to two multi-seller  asset-backed  commercial paper conduits
sponsored by a major financial  institution.  During the first quarter 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 January 31, 2000, the remaining
shelf  registration  available to NFRRC for the public  issuance of asset-backed
securities was $2,257 million.


<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  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. As of
January 31, 2000,  NFSC had a revolving  wholesale  note trust that provides for
the funding of $900 million of eligible wholesale notes.

At January 31, 2000,  available funding under the bank revolving credit facility
and the  asset-backed  commercial  paper program was $100 million,  of which $25
million  provided  funding  backup  for the  outstanding  short-term  debt.  The
remaining  $75  million,   when  combined  with   unrestricted   cash  and  cash
equivalents,  made $136 million  available to fund the general business purposes
of the Corporation.

As of January 31, 2000, the  Corporation  was a party to a total of $400 million
of forward  treasury locks and $75 million of forward  starting swaps related to
the anticipated March 2000 sale of retail  receivables.  The Corporation  closed
these  positions and the resulting $0.8 million gain was included in the gain on
the sale of receivables recognized in March 2000.

In the second  quarter of fiscal 2000, the  Corporation  entered into a total of
$200 million of forward  treasury locks 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  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 January 31, 2000 the cap
had a notional amount of $349 million and a fair value of $2.5 million.

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. Under the
terms of the agreement,  the Corporation  will make or receive payments based on
changes in  interest  rates.  The net  settlement  is  included  in retail  note
financing revenue.



<PAGE>



                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

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


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  quarter  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
Transportation's dealers and retail customers through 2000 and beyond.



<PAGE>


PART II - OTHER INFORMATION


Item 6.   Exhibits and Reports on Form 8-K

No reports on Form 8-K were filed  during the three  months  ended  January  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  March 15, 2000                     /s/P. E. Cochran
      --------------                     --------------------------------
                                            P. E. Cochran
                                            Vice President and Controller
                                            (Principal Accounting Officer)