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, 1999

                                       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,  1999,  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 and Nine Months Ended July 31, 1999 and 1998.......  2

            Statements of Consolidated Financial Condition --
            July 31, 1999; October 31, 1998; and July 31, 1998..............  3

            Statements of Consolidated Cash Flow --
            Nine Months Ended July 31, 1999 and 1998........................  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
                                        ------------------    -----------------
                                         1999        1998      1999       1998
                                        -------    -------    -------    ------
<S>                                     <C>        <C>        <C>       <C>
  Revenue
    Retail notes and lease financing....$ 42.4     $ 40.0     $119.2    $ 99.8
    Wholesale notes.....................  16.6       13.2       47.6      33.0
    Accounts............................   8.9        8.5       26.4      25.2
    Servicing fee income................   6.0        5.2       17.7      15.9
    Insurance premiums earned...........   8.9        8.5       25.9      24.4
    Marketable securities...............   2.3        3.9        6.7       7.7
                                        ------     ------     ------    ------
        Total...........................  85.1       79.3      243.5     206.0


  Expense
    Cost of borrowing
      Interest..........................  20.6       23.2       64.3      59.2
      Other.............................   1.5        2.0        4.7       5.5
                                        ------     ------     ------    ------
        Total...........................  22.1       25.2       69.0      64.7
                                        ------     ------     ------    ------

    Credit, collection and
      administrative...................   10.9        9.3       31.7      25.9
    Provision for (recovery of) losses
      on receivables...................    1.3       (2.6)       4.5      (1.4)
    Insurance claims and underwriting..    9.8       10.6       29.2      27.7
    Depreciation and other.............   11.6        7.9       32.1      21.0
                                        ------     ------     ------    ------
        Total..........................   55.7       50.4      166.5     137.9
                                        ------     ------     ------    ------


  Income Before Taxes on Income........   29.4       28.9       77.0      68.1

  Taxes on Income......................   11.7       11.2       29.8      26.3
                                        ------     ------     ------    ------

  Net Income...........................   17.7       17.7       47.2      41.8

  Retained Earnings

    Beginning of period................  113.5      110.2      109.0     113.1

    Dividends paid.....................   20.0       15.0       45.0      42.0
                                        ------     ------     ------    ------

    End of period...................... $111.2     $112.9     $111.2    $112.9
                                        ======     ======     ======    ======
</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
                                                 1999        1998        1998

                                  ASSETS

<S>                                           <C>         <C>         <C>
Cash and Cash Equivalents...................  $    6.7    $   14.1    $    4.9
Marketable Securities.......................     104.0       108.0       110.0

Finance Receivables
  Retail notes and lease financing..........     661.8       915.9       624.6
  Wholesale notes...........................     338.9       224.9        66.6
  Accounts..................................     295.1       382.9       316.5
                                              --------    --------    --------
                                               1,295.8     1,523.7     1,007.7
  Allowance for losses......................      (9.9)      (12.8)      (10.3)
                                              --------    --------    --------
      Finance Receivables, Net..............   1,285.9     1,510.9       997.4

Amounts Due from Sales of Receivables.......     270.3       245.9       259.9
Equipment on Operating Leases, Net..........     255.3       217.7       213.4
Repossessions...............................      21.0        14.4        16.3
Other Assets................................      86.6       101.9        82.6
                                              --------    --------    --------
Total Assets................................  $2,029.8    $2,212.9    $1,684.5
                                              ========    ========    ========


                    LIABILITIES AND SHAREOWNER'S EQUITY


Short-Term Borrowings.......................  $   17.9    $   21.8    $  148.8
Accounts Payable to Affiliates..............      73.1       136.8       119.9
Other Liabilities...........................      48.7        57.1        48.2
Senior and Subordinated Debt................   1,505.3     1,611.2       972.7
Dealers' Reserves...........................      24.9        24.0        24.0
Unpaid Insurance Claims and
  Unearned Premiums.........................      77.6        80.5        84.7

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.........................     111.2       109.0       112.9
  Accumulated other comprehensive income....       0.1         1.5         2.3
                                              --------    --------    --------
         Total..............................     282.3       281.5       286.2
                                              --------    --------    --------
Total Liabilities and Shareowner's Equity...  $2,029.8    $2,212.9    $1,684.5
                                              ========    ========    ========

</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
                                                            1999        1999
                                                          ---------   --------
<S>                                                       <C>         <C>
Cash Flow From Operations
  Net Income..............................................$   47.2    $   41.8
  Adjustments to reconcile net income to cash
    provided from operations:
    Gains on sales of receivables.........................   (11.5)      (15.3)
    Depreciation and amortization.........................    34.0        25.0
    Provision for (recovery of) losses on receivables.....     4.5        (1.4)
    Decrease in accounts payable to affiliates............   (63.7)      (11.6)
    Other.................................................   (16.3)      (14.3)
                                                           -------     -------
      Total...............................................    (5.8)       24.2
                                                           -------     -------

Cash Flow From Investing Activities
  Proceeds from sold retail notes......................... 1,193.4       931.9
  Purchase of retail notes and lease receivables..........(1,026.4)     (918.7)
  Principal collections on retail notes and
    lease receivables.....................................    42.5        68.5
  Acquisitions (over) under cash collections of
    wholesale notes and accounts receivable...............    (8.5)      118.7
  Purchase of marketable securities.......................   (39.0)      (33.2)
  Proceeds from sales and maturities of
    marketable securities.................................    43.0        37.8
  Purchase of equipment leased to others..................   (80.7)     (124.9)
  Sale of equipment leased to others......................    11.1        13.3
                                                           -------     -------
      Total...............................................   135.4        93.4
                                                           -------     -------

Cash Flow From Financing Activities
  Net (decrease) increase in short-term borrowings........    (3.9)        7.8
  Net increase (decrease) in bank revolving
    credit facility usage.................................    40.0       (48.0)
  Net decrease in asset-backed commercial paper
    facility usage........................................  (117.6)      (97.1)
  Proceeds from long-term debt............................   108.3        91.5
  Principal payments of long-term debt....................  (118.8)      (35.6)
  Dividends paid to Transportation........................   (45.0)      (42.0)
                                                           -------     -------
      Total...............................................  (137.0)     (123.4)
                                                           -------     -------

Decrease in Cash and Cash Equivalents.....................    (7.4)       (5.8)

Cash and Cash Equivalents at Beginning of Period..........    14.1        10.7
                                                           -------     -------

Cash and Cash Equivalents at End of Period................$    6.7    $    4.9
                                                           =======     =======

Supplemental disclosure of cash flow information

  Interest paid...........................................$   72.4    $   65.5
                                                           =======     =======

  Income taxes paid.......................................$   26.7    $   25.9
                                                           =======     =======
</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.

     The  accompanying  unaudited  financial  statements  have been prepared in
     accordance with the accounting policies described in the Corporation's 1998
     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 position and cash flow
     for the interim  periods  presented.  Interim  results are not  necessarily
     indicative  of  results to be  expected  for the full  year.  Certain  1998
     amounts have been reclassified to conform with the presentation used in the
     1999 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 receivable balances are as follows:

<TABLE>
<CAPTION>
                                             July 31     October 31     July 31
                                               1999         1998         1998
                                                        ($ Millions)
<S>                                          <C>          <C>          <C>
       Retail notes                          $1,950.0     $1,445.4     $1,670.7
       Wholesale notes                          600.0        700.0        672.8
                                             --------     --------     --------
           Total                             $2,550.0     $2,145.4     $2,343.5
                                             ========     ========     ========
</TABLE>

     In the first three  quarters of fiscal 1999,  in two  separate  sales,  the
     Corporation sold a total of $1,260 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 $545
     million of retail  notes in November  1998 to a  multi-seller  asset-backed
     commercial  paper conduit  sponsored by a major  financial  institution and
     $715 million of retail notes in June 1999 to an owner trust which, in turn,
     issued  securities  which were sold to  investors.  Aggregate  gains of $12
     million were recognized on the sales.  The proceeds of $1,211 million,  net
     of underwriting fees and credit enhancements,  were used by the Corporation
     for general working capital purposes.


<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


   The allowance for losses on receivables is summarized as follows:

<TABLE>
<CAPTION>
                                               July 31    October 31    July 31
                                                1999       1998         1998
                                                         ($ Millions)
<S>                                             <C>        <C>            <C>
       Allowance pertaining to:
           Owned notes                          $ 9.9      $12.8          $10.3
           Sold notes                            16.3       12.6           14.4
                                                -----      -----          -----
               Total                            $26.2      $25.4          $24.7
                                                =====      =====          =====
</TABLE>

3.   In September 1999, the Corporation  entered into a total of $150 million of
     forward  treasury locks in  anticipation  of a November 1999 sale of retail
     receivables.  These locks were  entered  into to reduce  exposure to future
     changes in interest rates. The Corporation intends to close these positions
     on the  pricing  date of the  sale.  Any  resulting  gain  or loss  will be
     included  in the  gain or loss on the  sale of  receivables  recognized  in
     November 1999.

     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 July 31, 1999 the
     notional amount was $399 million and the interest rate cap had a fair value
     of $2 million.

4.   In order to facilitate the  securitization of the Corporation's  retail and
     wholesale  receivables  the Corporation  has  established,  over the years,
     three  special  purpose   corporations   (Navistar   Financial   Securities
     Corporation,  Navistar Financial Retail  Receivables  Corporation and Truck
     Retail  Instalment  Paper  Corporation).  In  connection  with the sale and
     leaseback of certain of its leasing portfolio  assets,  the Corporation and
     its subsidiary,  Harco Leasing,  Inc. ("Harco"),  have established Navistar
     Leasing Company ("NLC"),  a Delaware  business trust. NLC holds legal title
     to leased vehicles and is the lessor on substantially all leases originated
     by the  Corporation.  The assets of NLC have been and will  continue  to be
     allocated into various  beneficial  interests issued by NLC. Harco owns one
     such beneficial  interest in NLC and Harco has transferred other beneficial
     interests  issued by NLC to  purchasers  under  sale/leaseback  agreements.
     Neither the beneficial  interests held by purchasers  under  sale/leaseback
     agreements or the assets  represented  thereby,  nor legal  interest in any
     assets of NLC, are available to Harco, the Corporation or its creditors.


<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

5.   Effective November 1, 1998, the Corporation  adopted Statement of Financial
     Accounting  Standards  No.  130,  "Reporting  Comprehensive  Income"  which
     establishes standards for reporting and display of comprehensive income and
     its   components.   Financial   statements  for  prior  periods  have  been
     reclassified  as  required  by  the  statement.   The  Corporation's  total
     comprehensive income was as follows:
<TABLE>
<CAPTION>
                                               Three Months        Nine Months
                                               Ended July 31      Ended July 31
                                              1999     1998       1999     1998
                                                        ($ Millions)
<S>                                          <C>      <C>        <C>      <C>
     Net Income  . . . . . . . . . . . . .   $17.7    $17.7      $47.2    $41.8
     Changes in unrealized losses on
       marketable securities . . . . . . .    (1.2)    (2.7)      (1.4)    (1.4)
                                             -----    -----      -----    -----
         Total Comprehensive Income. . . .   $16.5    $15.0      $45.8    $40.4
                                             =====    =====      =====    =====
</TABLE>




<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  1999  industry  retail  sales for Class 5
through 8 trucks was  approximately  20% higher  than  1998.  The  Corporation's
retail  financing  acquisitions  during  the first nine  months of fiscal  1999,
including retail notes and finance and operating leases, were $1,107 million, 6%
higher than 1998.  The  increase  is  primarily  the result of the strong  truck
industry demand.  The  Corporation's  finance market share of new  International
trucks sold in the U.S. was 16.5% in fiscal 1999 and 1998. Serviced retail notes
and lease financing  balances were $2,867 million and $2,514 million at July 31,
1999 and 1998, respectively.

In spite of the continued strong liquidity in the commercial  financing  market,
the  Corporation  provided 96% and 94% of the wholesale  financing of new trucks
sold to Transportation's dealers during the first nine months of fiscal 1999 and
1998, respectively. Serviced wholesale note balances were $1,036 million at July
31, 1999, a 21%  increase  compared to July 31, 1998 due to the strong  industry
demand.


Results of Operations

The  components of net income for the three and nine month periods ended July 31
are as follows:
<TABLE>
<CAPTION>
                                                Three Months       Nine Months
                                                Ended July 31     Ended July 31
                                             ----------------    ---------------
                                              1999     1998       1999     1998
                                              ----     ----       ----     ----
<S>                                          <C>      <C>        <C>      <C>
Income before income taxes:
  Finance operations........................ $28.0    $27.3      $73.7    $63.9
  Insurance operations......................   1.4      1.6        3.3      4.2
                                             -----    -----      -----    -----
      Income before taxes...................  29.4     28.9       77.0     68.1
Taxes on income.............................  11.7     11.2       29.8     26.3
                                             -----    -----      -----    -----
      Net income............................ $17.7    $17.7      $47.2    $41.8
                                             =====    =====      =====    =====
</TABLE>


<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)

1999 pretax income was $29 million for the third quarter and $77 million  fiscal
year to  date,  which  was  consistent  with  and $9  million  higher  than  the
respective  periods in 1998. The  improvement for both periods was due primarily
to  higher   finance   receivable   balances   resulting  from  an  increase  in
Transportation's  sales  and a higher  level  of  average  outstanding  accounts
payable to affiliates which reduced debt levels.  This was offset, in part, by a
higher provision for losses,  higher costs to service the larger portfolio,  and
the competitive  commercial  financing market which continued to put pressure on
retail and wholesale finance margins.

Retail note and lease revenue increased to $119 million in the first nine months
of 1999,  $19  million  higher  than the same  period in 1998.  The  increase is
primarily the result of higher retail financing  activities and continued growth
in lease financing,  offset in part by lower yields. Included in retail note and
lease revenue is operating  lease revenue of $45 million and $32 million in 1999
and 1998,  respectively.  For operating leases,  the Corporation  recognizes the
entire lease payment as revenue and records  depreciation  expense on the assets
under lease.

Wholesale note revenue was $48 million in the first nine months of 1999 compared
to $33 million for the  comparable  period in fiscal 1998 due  primarily  to the
higher level of wholesale financing activity,  offset in part by lower yields in
response to the lower average prime interest rate.

Borrowing costs increased $4 million to $69 million during the first nine months
of 1999 primarily as a result of higher average receivable funding requirements,
partially offset by lower average interest rates and 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 $9 million for the first nine
months of fiscal year 1999. The Corporation's  weighted average interest rate on
all debt  decreased  during the first  nine  months of 1999 to 5.6% from 6.4% in
1998  primarily  due to lower  average  interest  rates and the maturity of high
yield subordinated debt.

Credit,  collection and administrative  expenses increased to $32 million during
the first nine months of 1999 from $26 million in 1998. The increase in 1999 was
primarily  due to  higher  costs to  service  the  larger  portfolio  and  costs
associated with year 2000 initiatives.


<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 $5 million for the first nine months
of 1999  compared to a net recovery of $1 million in 1998.  The increase in 1999
was primarily due to the increase in serviced finance receivable  balances and a
non-recurring  loss  recovery  in the third  quarter of 1998.  Notes and account
write-offs, net of recoveries, including sold notes, were $4 million in 1999 and
$2 million of recoveries in 1998.  The  Corporation's  allowance for losses as a
percentage of serviced  finance  receivables was .62%, .64% and .64% at July 31,
1999, October 31, 1998 and July 31, 1998.

Depreciation  and other  expenses  during the first nine  months of 1999 was $32
million  compared to $21 million in the comparable  period of 1998. The increase
is primarily  the result of a larger  investment  in equipment  under  operating
leases.


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 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.  In
January 1998,  Standard and Poors raised the  Corporation's  senior debt ratings
from BB to BB+, while the subordinated  debt ratings were also raised from B+ to
BB-.

The Corporation's operations used $6 million in cash in the first nine months of
1999 as the cash  provided  from net income was offset by a decrease in accounts
payable to affiliated  companies.  Investing activities provided $135 million in
cash  during this period  principally  as a result of the sale of retail  notes,
offset in part by the purchase of retail notes and lease  receivables.  The cash
generated  from investing  activities was used primarily to lower  borrowings in
the   asset-backed   commercial   paper   facility  and  to  pay   dividends  to
Transportation of $45 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)

Receivable  sales  were a  significant  source of funding in both 1999 and 1998.
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 nine  months of fiscal  1999,  the  Corporation  sold
$1,260 million of retail notes, net of unearned finance income, through Navistar
Financial Retail Receivables  Corporation  ("NFRRC"), a wholly owned subsidiary.
The  Corporation  sold  $545  million  of  retail  notes in  November  1998 to a
multi-seller   asset-backed  commercial  paper  conduit  sponsored  by  a  major
financial  institution and $715 million of retail notes in June 1999 to an owner
trust which, in turn, issued securities which were sold to investors. During the
first nine months of fiscal 1998 the  Corporation  sold $1,001 million of retail
notes, net of unearned finance income,  through NFRRC, to owner trusts which, in
turn, issued  securities which were sold to investors.  As of July 31, 1999, the
remaining  shelf  registration  available  to NFRRC for the public  issuance  of
asset-backed securities was $2,257 million.

As of July 31, 1999, Navistar Financial Securities  Corporation,  a wholly-owned
subsidiary  of the  Corporation,  had a  revolving  wholesale  note  trust  that
provides for the funding of $600 million of eligible wholesale notes.

At July 31, 1999, available funding under the bank revolving credit facility and
the  asset-backed  commercial  paper  facility  was $220  million,  of which $18
million  provided  funding  backup  for the  outstanding  short-term  debt.  The
remaining  $202  million,   when  combined  with   unrestricted  cash  and  cash
equivalents,  made $209 million  available to fund the general business purposes
of the Corporation.

In  September  1999,  the  Corporation  entered  into a total of $150 million of
forward  treasury  locks in  anticipation  of a  November  1999  sale of  retail
receivables.  These locks were entered into to reduce exposure to future changes
in  interest  rates.  The  Corporation  intends to close  these positions on the
pricing  date of the sale.  Any  resulting  gain or loss will be included in the
gain or loss on the sale of receivables recognized in November 1999.

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 July 31, 1999 the  notional  amount was $399 million and the
interest rate cap had a fair value of $2 million.





<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

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


Year 2000

The  Corporation has identified all significant  information  technology  ("IT")
applications that will require remediation, which in some cases will involve the
replacement of systems,  to ensure Year 2000  compliance.  Internal and external
resources are being used to make the required modifications and to test for Year
2000 compliance.  The Corporation anticipates that the modifications and testing
process  of  all significant IT systems  will  be  substantially complete by the
end of September 1999, which is prior to any anticipated impact on its operating
systems.

As of July 31, 1999 the Corporation believes it has remediated approximately 94%
of its  non-compliant IT systems.  Total costs connected with the remediation of
the  Corporation's  significant  IT systems during the first nine months of 1999
totaled $2  million,  and for  fiscal  1998 and 1997  totaled $3 million  and $1
million,  respectively.  Estimated future costs are not material.  Approximately
25% of the total  costs,  representing  investment  in new IT  systems,  will be
capitalized and depreciated over three to five years. The total cost of the Year
2000 project has not had nor is it anticipated to have a material  impact on the
Corporation's  financial  position or results of  operations  and will be funded
through operating cash flows.

While certain aspects of the Corporation's  businesses could operate on a manual
basis  for a  period  of  time,  in the  event  Year  2000  compliance  for  its
significant IT systems is not reached,  the Corporation  currently believes that
the most reasonably likely worst case scenario would be the inability to sustain
its  current  level  of  performance  and  customer  service.   Additionally,  a
significant  failure of the banking  systems or key  entities  in the  financial
markets  could  adversely  affect the  Corporation's  ability to access  various
credit and money markets.  The Corporation is therefore  committed to taking all
appropriate  actions to achieve  Year 2000  compliance  for its  significant  IT
systems  before the  millennium  date change.  The  Corporation  has developed a
detailed plan,  which includes an anticipated  remediation  completion  date for
each significant IT system and a scheduled overall  completion date for the end
of September  1999.  Management  reviews the  progress  under the action plan on
a  weekly  basis.  Contingency plans  have  been developed  that define  how the
company  will continue to operate critical  business processes in the event of a
Year 2000  problem.  Review,  cataloging  and  testing  will continue  prior  to
activation in December 1999.



<PAGE>


                         NAVISTAR FINANCIAL CORPORATION
                                AND SUBSIDIARIES

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


Year 2000 (continued)

The Corporation has initiated formal  communications  with all significant third
party  suppliers  which  provide  operational  support  and  non-IT  systems  to
determine the extent to which the  Corporation  would be vulnerable in the event
that one or more of those third  parties fail to  remediate  their own Year 2000
issues. The Corporation has received  assurances from its significant  suppliers
of cash  management  services that they will be able to operate in the Year 2000
and beyond, without interruption in service. While the Corporation believes that
it does not have significant exposure to other significant  suppliers' Year 2000
problems,  it is  seeking  compliance  assurances  from such  other  significant
suppliers.

The costs of the project and the date on which the Corporation  believes it will
complete the Year 2000  remediation  are based on  management's  best estimates,
which were derived utilizing  numerous  assumptions of future events,  including
the continued availability of certain resources,  third party modification plans
and other factors.  However, there can be no guarantee that these estimates will
be achieved and actual results could differ  materially from those  anticipated.
Specific factors that might cause such material differences include, but are not
limited to, the  availability  and cost of qualified  personnel,  the ability to
locate and correct all relevant computer codes and similar uncertainties.


Business Outlook

The  truck  industry  is  forecasted  to  remain  strong  in  fiscal  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.

Management  believes that collections on the outstanding  receivables  portfolio
plus cash available from the  Corporation's  various funding sources will permit
Navistar  Financial  to meet  the  financing  requirements  of  Transportation's
dealers and retail customers through 1999 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, 1999.



                                    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 13, 1999                 /s/P. E. Cochran
     ------------------                 ----------------
                                        P. E. Cochran
                                        Vice President and Controller
                                        (Principal Accounting Officer)