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Rating Action:

Moody's assigns Ba1 rating to Goodyear's new senior secured term loan

Global Credit Research - 27 Mar 2012

Approximately $1.2 billion of debt rated

New York, March 27, 2012 -- Moody's Investors Service assigned a Ba1 rating to The Goodyear Tire & Rubber Company's ("Goodyear") new $1.2 billion senior secured term loan. The new senior secured term loan along with a new unrated $2 billion senior secured revolving credit facility will be used to replace Goodyear's existing revolving credit and term loan facilities and extend the capital structure maturity profile. In a related action Moody's affirmed Goodyear's Corporate Family Rating at Ba3 and other ratings as detailed below. The rating outlook remains stable.

Ratings assigned:

The Goodyear Tire & Rubber Company

$1.2 billion second lien term loan due 2019, Ba1 (LGD-2, 16%);

Ratings affirmed:

The Goodyear Tire & Rubber Company

Corporate Family Rating, Ba3;

Probability of Default Rating, Ba3;

SGL-2, Speculative Grade Liquidity Rating;

$1.5 billion first lien revolving credit facility due 2013, Baa3 (LGD-1, 5%) -- this rating will be withdrawn upon replacement;

$1.2 billion second lien term loan due 2014, Ba1 (LGD-2, 16%) -- this rating will be withdrawn up repayment;

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.:

Baa3 (LGD-1, 6%), €400 million of first lien revolving credit facilities due April 2016;

Ba2 (LGD-2, 27%), €250 million of senior unsecured notes due April 2019.

RATINGS RATIONALE

The affirmation of Goodyear's Ba3 Corporate Family Rating and stable outlook continues to reflect the company's efforts to improve its business profile by selling a greater share of higher value added tires in its product mix, pursuing market pricing initiatives consistent with its higher value added product line, and delivering on cost saving initiatives. Please see press release dated February 23, 2012.

The new bank credit facilities will be used to replace Goodyear's existing $1.5 billion revolving credit and $1.2 billion term loan facilities. The terms and conditions for the new bank credit facilities will be substantially similar to the existing bank credit facilities.

The principal methodology used in rating The Goodyear Tire & Rubber Company 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.

The Goodyear Tire & Rubber Company, based in Akron, OH, is one of the world's largest tire companies with 53 manufacturing facilities in 22 countries around the world. Revenues in 2011 were approximately $22.8 billion.

REGULATORY DISCLOSURES

Although this credit rating has been issued in a non-EU country which has not been recognized as endorsable at this date, this credit rating is deemed "EU qualified by extension" and may still be used by financial institutions for regulatory purposes until 30 April 2012. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant 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 relevant 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 relevant 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.

Information sources used to prepare the rating are the following : parties involved in the ratings, parties not involved in the ratings, public information, confidential and proprietary Moody's Investors Service information, and confidential and proprietary Moody's Analytics information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

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.

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 Ba1 rating to Goodyear's new senior secured term loan
No Related Data.

 

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