Approximately $4.9 billion of debt obligations affected
New York, February 20, 2013 -- Moody's Investors Service assigned a B1 rating to The Goodyear Tire &
Rubber Company's ("Goodyear") proposed $750 million senior unsecured
notes. The proposed unsecured notes are expected to be used to
fund contributions to Goodyear's U.S. pension plans
and for general corporate purposes. In a related action Moody's
affirmed Goodyear's Corporate Family Rating at Ba3 and other ratings as
detailed below. The rating outlook is negative.
Ratings assigned:
The Goodyear Tire & Rubber Company
$750 million senior unsecured notes due 2021, B1 (LGD-4,
66%);
Ratings affirmed:
The Goodyear Tire & Rubber Company
Corporate Family Rating, Ba3;
Probability of Default Rating, Ba3-PD;
SGL-2, Speculative Grade Liquidity Rating;
$1.2 billion second lien term loan due 2019, Ba1 (LGD-2,
16%)
8.75% senior unsecured guaranteed notes due 2020,
B1 (LGD-4, 66%);
8.25% senior unsecured guaranteed notes due 2020,
B1 (LGD-4, 66%);
7.0% senior unsecured guaranteed notes due 2022, B1
(LGD-4, 66%);
7.0% senior unsecured unguaranteed notes due 2028,
B2 (LGD-6, 96%);
(P)B1, guaranteed senior unsecured shelf.
Goodyear Dunlop Tires Europe B.V.:
€400 million of first lien revolving credit facilities due April
2016, Baa3 (LGD-1, 6%);
€250 million of senior unsecured notes due April 2019, Ba2
(LGD-2, 27%).
RATINGS RATIONALE
The proposed note offering is part of Goodyear's stated strategy
to take actions to de-risk its U.S. unfunded pension
obligations. Goodyear is expected to contribute the net proceeds
of the proposed note offering to the U.S. pension plans
along with implementing a hedging strategy to protect against adverse
market moves in interest rates and asset returns while allowing upside
participation. Moody's considers the company's actions
to address its pension obligations as constructive and could contribute
to credit metric improvement over the coming year. Nevertheless,
the ratings consider the potential for such improvement to be tempered
by weak economic trends which is incorporated into the negative outlook.
See press release dated February 19, 2013.
The Goodyear Tire & Rubber Company, based in Akron, OH,
is one of the world's largest tire companies with 52 manufacturing facilities
in 22 countries around the world. Revenues in 2012 were approximately
$21 billion.
The principal methodology used in this rating was the Global Automotive
Supplier Industry Methodology published in January 2009. Other
methodologies used include Loss Given Default for Speculative-Grade
Non-Financial Companies in the U.S., Canada
and EMEA published in June 2009. Please see the Credit Policy page
on www.moodys.com for a copy of these methodologies.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this rating action, and
whose ratings may change as a result of this rating action, the
associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
Timothy L. Harrod
Vice President - Senior Analyst
Corporate Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Michael J. Mulvaney
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's assigns B1 rating to Goodyear's new senior unsecured notes