Moody’s eyes Goodyear, Cooper for cut

Moody’s Investors Service said it placed the ratings of the Goodyear Tire & Rubber Co. on review for downgrade, including the B1 corporate family rating, B1-PD probability of default rating, senior secured second-lien term loan rating of Ba2, senior unsecured guaranteed notes rating of B2, senior unsecured unguaranteed notes rating of B3 and Goodyear Europe BV’s senior unsecured guaranteed notes rating of Ba3. The SGL-3 speculative grade liquidity rating is unchanged.

Moody’s also placed the ratings of Cooper Tire & Rubber Co. on review for downgrade, including the Ba3 CFR, Ba3-PD PDR and senior unsecured notes rating of B1.

These actions follow Goodyear’s plan to acquire Cooper Tire in a cash-and-stock transaction valued at about $2.8 billion, the agency said.

“In the event of a ratings downgrade, Moody’s expects the rating action for Goodyear to be limited to one notch. However, Goodyear’s plan for Cooper Tire’s existing debt is still being determined. In the event the debt is repaid at closing, Moody’s would withdraw Cooper Tire’s ratings,” the agency said in a press release.

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