Fitch: Goodyear outlook negative

Fitch Ratings said it revised the outlook for Goodyear Tire & Rubber Co. to negative from stable and affirmed its ratings, including the issuer default rating at BB-, $1.5 billion first-lien credit facility and $1.2 billion second-lien term loan at BB+ and senior unsecured debt at B+ and Goodyear Dunlop Tires Europe BV's €505 million European secured credit facilities at BB+.

The agency said the outlook revision reflects its estimates of the impact that the weakening global economy and auto industry will have on Goodyear's financial results, cash flow and balance sheet. Fitch's credit concerns include significant expected cash usage this year, contracting margins, declining volumes, substantial underfunded pension liabilities, raw material cost increases in the first half, high leverage and execution risk of Goodyear's cash-savings strategies.

Factors supporting the ratings include Goodyear's strong liquidity position, cost-reduction actions, reduced OPEB liabilities, global diversification and a focused marketing strategy that has helped improve brand strength and revenues per tire, the agency said.

The debt-to-EBITDA ratio was 3.5 times as of Dec. 31.

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