New Issue: Goodyear doubles deal size to $1 billion, prices 10½% seven-year notes at 95.846

By Paul A. Harris

St. Louis, May 6 - The Goodyear Tire & Rubber Co. priced $1 billion of 10½% seven-year senior notes (B1/B+/) at 95.846 to yield 11 3/8% on Wednesday, according to informed sources.

The slightly restructured deal doubled in size from $500 million.

The yield was printed at the tight end of the 11½% area yield talk. The issue price came somewhat rich to the 5 points area original issue discount price talk.

J.P. Morgan Securities Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc. and Goldman, Sachs & Co. were joint bookrunners for the Securities and Exchange Commission-registered deal.

Call protection was decreased to three years from four years. In three years the notes become callable at par plus ¾ of the coupon, or 107 7/8.

Proceeds, together current cash and cash equivalents and unused availability under credit facilities, will be used for general corporate purposes, including the repayment on or prior to maturity of $500 million of six-month Libor plus 375 bps senior floating-rate notes due Dec. 1, 2009. The floaters presently bear interest at 6.29%.

The issuer is a tire manufacturer based in Akron, Ohio.

Issuer:	The Goodyear Tire & Rubber Co.
Face amount:	$1 billion, increased from $500 million
Proceeds:	$958.46 million
Maturity:	May 15, 2016
Security description:	Senior notes
Bookrunners:	J.P. Morgan Securities Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co.
Co-managers:	BNP Paribas Securities Corp., Calyon Securities (USA) Inc., HSBC Securities (USA) Inc., Morgan Stanley & Co. Inc. and Natixis Bleichroeder Inc.
Coupon:	10½%
Price:	95.846
Yield:	11 3/8%
Spread:	877 bps
Call features:	Make-whole at Treasuries plus 50 bps until May 15, 2012, then callable at 107.875, 105.25, 102.625, par on and after May 15, 2015 (call protection decreased by one year, with first call at par plus ¾ coupon)
Equity clawback:	35% at 110.50 until May 15, 2012
Trade date:	May 6
Settlement date:	May 11
Ratings:	Moody's: B1
	Standard & Poor's: B+
Distribution:	SEC registered
Price talk:	11½% area with about 5-point original issue discount

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