Moody's rates Goodyear notes

Moody's Investors Service said it confirmed the senior implied rating of Goodyear Tire & Rubber at B1 and assigned a rating of B3 to Goodyear's planned private placement of senior notes which have junior liens on certain collateral that also secures the company's senior secured credit facilities.

Moody's lowered Goodyear's senior secured ABL term loan A and revolver to B1 from Ba3, senior secured U.S. bank facilities to B1 from Ba3, senior secured European bank facilities of Goodyear Dunlop Tires Europe BV to B1 from Ba3, ABL term loan B with junior lien to B2 from B1, senior unsecured long-term issuer rating to B3 from B2, and senior unsecured rating to B3 from B2.

Moody's said the new $650 million issue of senior notes, along with a new $650 million asset-based term loan B will enhance the company's overall liquidity but will significantly increase the percentage of secured claims in the company's capital structure. Consequently, in a related action, Moody's lowered its ratings on certain secured and unsecured debt instruments to reflect their altered relative priority within Goodyear's capital structure.

Moody's said the rating action follows Goodyear's announcement of plans for a private placement for up to an additional $650 million of senior secured notes with junior liens. This would take the total amount of new secured financing announced over the last month to $1.3 billion.

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