Moody’s upgrades Goodyear

Moody’s Investors Service said it upgraded Goodyear Tire & Rubber Co.’s corporate family rating to Ba2 from Ba3 and probability of default rating to Ba2-PD from Ba3-PD.

The agency also revised the company’s outlook to stable from positive.

Moody’s also said it upgraded the ratings of Goodyear’s second-lien term loan to Baa3 from Ba1, unsecured guaranteed notes to Ba3 from B1, unsecured unguaranteed notes to B1 from B2 and Goodyear Dunlop Tires Europe BV’s senior unsecured notes to Ba1 from Ba2.

The outlook for Goodyear Dunlop Tires Europe also was revised to stable from positive.

The company’s speculative grade liquidity rating also was raised to SGL-1 from SGL-2.

The upgrades reflect the company’s ongoing pace of overall improving segment operating income, supported by sustained cost saving actions and low raw material costs, Moody’s said.

The agency said it expects the company to continue to see benefits from these items over the coming quarters to solidly position the company’s credit metrics in line with a Ba2 corporate family rating.

There could be volatility in the pace of segment operating income improvement, such as the company’s experience in the fourth quarter of 2014, due to weather conditions and unbalanced regional economic conditions in the company’s end markets, Moody’s added.

But Goodyear’s results should continue to benefit over the longer term from the favorable business environment for tires, the agency said.

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