Moody's lowers some Goodyear notes

Moody's Investors Service said it downgraded Goodyear Tire & Rubber Co.'s 9% senior unsecured notes due 2015, floating-rate unsecured note due 2009 and 8 5/8 % senior unsecured notes due 2011 to B1 (LGD4, 66%) from Ba3 (LGD4, 58%).

The agency affirmed the company's corporate family and probability-of-default ratings at Ba3, speculative-grade liquidity rating at SGL-2, $1.5 billion first-lien revolving credit facility at Baa3 (LGD1, 9%), $1.2 billion second-lien term loan at Ba1 (LGD2, 25%) and its 7 6/7% senior notes and 7% senior notes at B2 (LGD6, 95%).

The outlook is negative.

The agency said the affirmation of Goodyear's Ba3 corporate family rating reflects the company's global scale, geographic diversification and market share, which are expected to support the company's position in the tire business despite the near-term challenges of a cyclical downturn in tire demand.

However, continued raw material price increases through the first nine months of 2008 and the recent global deterioration in market conditions have negatively impacted Goodyear's operating margins for the third fiscal quarter and are expect to negatively impact operating performance through 2009, Moody's said.

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