Goodyear begins exchange offer, consent solicitation for 7.857% notes

By Angela McDaniels

Tacoma, Wash., Feb. 2 - Goodyear Tire & Rubber Co. has begun an offer to exchange its $650 million principal amount of 7.857% notes due 2011 for a new series of 8¾% notes due 2020, according to a company news release.

Goodyear is also soliciting consents from the noteholders to delete many of the restrictive covenants and some events of default in the indenture governing the notes. Holders may not deliver consents to the proposed amendments without tendering their notes and vice versa.

For each $1,000 principal amount of notes tendered, holders will receive $1,080 principal amount of new notes as well as a cash payment for accrued interest up to but excluding the settlement date.

The new notes will be senior unsecured obligations of Goodyear and will be guaranteed on a senior unsecured basis by some of the company's subsidiaries. The old notes are not guaranteed by any Goodyear subsidiaries.

Goodyear said it is conducting the offer in order to extend the maturity of a portion of its debt coming due in 2011.

The exchange offer and consent solicitation will expire at 11:59 p.m. ET on March 2.

Their completion is subject to some conditions including the receipt of tenders for at least $260 million principal amount of notes. The offer is not conditioned on Goodyear's receipt of the consents necessary to make the proposed amendments.

Citi (212 723-6106) is the dealer manager and solicitation agent, and Global Bondholder Services Corp. (866 924-2200) is the information agent and exchange agent.

Goodyear is a tire company based in Akron, Ohio.

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