Moody’s applies Ba3 to Goodyear notes

Moody's Investors Service said it assigned a Ba3 rating to the proposed $900 million issuance of senior unsecured notes by Goodyear Tire & Rubber Co.

Net proceeds, together with current cash and cash equivalents, are expected to be used to redeem in full the $900 million 6˝% senior unsecured notes due 2021 at a redemption price equal to 104.875% of the principal amount plus accrued interest to the redemption date.

Moody's said it expects the current transaction will generate interest savings for the company and better position the company's credit metrics within the assigned rating. Goodyear continues to demonstrated strong operating performance with its first quarter 2016 segment operating income improving 8% over the prior year quarter (14% after adjusting for the deconsolidation of Venezuela).

The agency looks for Goodyear's operations to generate strong cash flow resulting in continued debt reduction supportive of previously established positive rating action drivers.

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