Published on 2/27/2004 in the Prospect News High Yield Daily.
New Issue: Goodyear prices restructured $650 million two-part, seven-year issue
By Paul A. Harris
St. Louis, Feb. 27 - Goodyear Tire & Rubber Co. priced a restructured $650 million issue of seven-year senior secured junior lien notes (B3/B) on Friday, according to market sources.
The Akron, Ohio, tire maker sold $450 million of fixed-rate notes at 99.413 with an 11% coupon to yield 11 1/8%.
Price talk was in the area of 11%.
The company also sold $200 million of floating-rate notes at par to yield six-month Libor plus 800 basis points.
JP Morgan, Citigroup and Credit Suisse First Boston were the placement agents for the Regulation D private placement.
The notes are reportedly secured by junior liens on certain of the collateral securing the company's senior secured U.S. credit facilities.
Proceeds will be used to repay bank debt and for general corporate purposes.
Originally the offering had been comprised of a single $650 million fixed-rate issue.
| Issuer: | Goodyear Tire & Rubber Co.
|
| Amount: | $650 million
|
| Maturity: | March 1, 2011
|
| Security description: | Senior secured junior lien notes
|
| Placement agents: | JP Morgan, Citigroup, Credit Suisse First Boston
|
| Distribution: | Regulation D
|
| Pricing date: | Feb. 27
|
| Settlement date: | March 12
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B
|
|
|
| Fixed-rate tranche
|
| Amount: | $450 million
|
| Coupon: | 11%
|
| Price: | 99.413
|
| Yield: | 11 1/8%
|
| Spread: | 764 basis points
|
| Call features: | T+50 make-whole call until March 1, 2008, then at 105.5, 104, 102, par on March 1, 2011
|
| Equity clawback: | Until March 1, 2007 for 35% at 111.0
|
| Price talk: | 11% area
|
|
|
| Floating-rate tranche
|
| Amount: | $200 million
|
| Coupon: | Six-month Libor plus 800 basis points
|
| Price: | Par
|
| Yield: | Six-month Libor plus 800 basis points
|
| Call features: | Callable after March 1, 2008 at 105.5, 104, 102, par on March 1, 2011
|
| Equity clawback: | Until March 1, 2007 for 35% at par plus the then applicable coupon
|
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