S&P rates Goodyear floaters, notes B-

Standard & Poor's said it assigned its B- ratings to Goodyear Tire & Rubber Co.'s $500 million floating rate senior notes due 2009 and its $500 million fixed rate senior notes due 2011 and placed the ratings on CreditWatch with negative implications.

Goodyear's B+ corporate credit and other ratings remain on CreditWatch with negative implications where they were placed Oct. 16, because of the potential for business disruptions and earnings pressures that could result from the ongoing labor dispute at most of the company's North American tire plants, the agency said.

S&P added that proceeds from the new debt issues will be used to refinance $515 million of debt coming due in the next six months and for general corporate purposes.

The agency said that the new capital will raise Goodyear's already high debt levels, but will improve liquidity by increasing the company's current $2.3 billion cash position, while its U.S. salaried workforce remains on strike.

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