S&P rates Goodyear notes B+

Standard & Poor's said it assigned a B+ rating to the Goodyear Tire & Rubber Co.'s proposed $750 million in senior unsecured notes due 2021.

The agency also said it assigned a recovery rating of 5 to the notes, indicating 10% to 30% expected default recovery.

The proceeds will be used to fund contributions to the company's frozen U.S. pension plans and for general corporate purposes.

The agency said it views the debt-financed funding of the pension as leverage neutral since it considers unfunded post-retirement obligations as debt-like.

The notes are senior unsecured obligations of Goodyear and the guarantors, ranking equal in right of payment with existing and future unsubordinated debt, S&P said.

The notes also will be effectively subordinated to all existing and future secured debt of the company and subsidiary guarantors to the extent of the collateral securing the debt, the agency said.

The ratings reflect the company's high leverage and the substantial competition in both the replacement and original equipment tire markets, S&P said.

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