S&P upgrades Goodyear Tire

Standard & Poor’s said it raised the corporate credit rating on the Goodyear Tire & Rubber Co. to BB from BB-.

The agency also said it raised the rating on the company’s second-lien term loan facility to BBB- from BB and revised the recovery rating on the facility to 1 from 2.

The 1 recovery rating indicates 90% to 100% expected default recovery.

S&P also said it raised the rating on the company’s senior unsecured notes to BB from B+ and revised the recovery rating on the notes to 4 from 5.

The 4 recovery rating indicates 30% to 50% expected default recovery.

The agency also said it raised the rating on Goodyear Dunlop Tires Europe BV’s €250 million senior unsecured notes to BB+ from BB. The 2 recovery rating indicates 70% to 90% expected default recovery.

S&P also said it raised the rating on Goodyear Dunlop Tires Europe’s €400 million senior secured revolver to BBB- from BB+. The 1 recovery rating on the revolver indicates 90% to 100% expected default recovery.

The outlook is stable.

The upgrades reflect the company’s improved credit metrics because of its efforts to continually de-lever and pursue profitable growth, thereby expanding its EBITDA margins, the agency said.

Goodyear is expected to retain a substantial portion of its large cash balances over time, S&P said.

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