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Rating Action:

Moody's assigns B1 rating to Goodyear's new senior unsecured notes

Global Credit Research - 20 Feb 2013

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
No Related Data.

 

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