Fitch upgrades Goodyear, notes to BB

Fitch Ratings said it upgraded the issuer default ratings of Goodyear Tire & Rubber Co. and its Goodyear Dunlop Tires Europe BV subsidiary to BB from BB-.

In addition, the agency upgraded Goodyear’s senior unsecured notes rating to BB/RR4 from BB-/RR4.

Fitch affirmed the ratings on Goodyear’s secured revolving credit facility and second-lien term loan, as well as Goodyear Dunlop’s secured revolving credit facility at BB+/RR1. It also affirmed Goodyear Dunlop’s senior unsecured notes rating at BB/RR2.

Goodyear’s ratings apply to a $2 billion asset-based revolving credit facility, a $598 million second-lien term loan and $3 billion in senior unsecured notes. Goodyear Dunlop’s ratings apply to a €550 million secured revolving credit facility and €250 million in senior unsecured notes.

The outlooks are stable.

Fitch said the upgrade reflects the strengthening of the tire manufacturer's credit profile beyond our previous expectations. This has been the result of significantly improved profitability and strong free cash flow (FCF) generation which the company has used to reduce debt beyond what Fitch had previously contemplated.

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