Goodyear revises talk on planned $435 million mandatory convertible preferreds to 5.75%-6.25%, up 25%

By Rebecca Melvin

New York, March 28 - Price talk was revised on Goodyear Tire & Rubber Co.'s planned $435 million of mandatory convertible preferred stock to a dividend of 5.75% to 6.25%, changed from 6% to 6.5%, and for an initial conversion premium of 25%, tightened from 20% to 25%, according to a syndicate source.

Price talk was revised after the deal launched ahead of the market open on Monday and before pricing late on the same date.

The registered, off-the-shelf offering has an over-allotment option for an additional $65 million, or 1.3 million shares.

The mandatory, with a $50 par, will convert automatically on April 1, 2014 and has dividend and takeover protection.

Proceeds from the offering will be used to redeem $350 million of Goodyear's 10.5% senior straight notes due May 15, 2016 at 110.5% of the principal amount plus interest.

Remaining proceeds will be used for general corporate purposes, which may include repaying debt.

Goldman Sachs & Co., J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Credit Agricole Securities (USA) Inc. will be the joint bookrunners for the offering, with BNP Paribas Securities Corp., HSBC Securities (USA) Inc. and Natixis as the co-managers.

Goodyear is an Akron, Ohio-based tire maker.

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