Goodyear Add-On Oversubscribes

Syndication is oversubscribed on The Goodyear Tire & Rubber Company's new $300 million term loan, which is being added to the company's existing $1.3 billion asset-based credit facility.

  • 30 Jan 2004
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Syndication is oversubscribed on The Goodyear Tire & Rubber Company's new $300 million term loan, which is being added to the company's existing $1.3 billion asset-based credit facility. Pricing on the new piece is LIBOR plus 41/4%, according to a source familiar with the deal. J.P. Morgan and Citibank lead the new financing, as well as the existing loan.

"We're taking advantage of the strong markets right now," said Keith Price, a Goodyear spokesman. "We believe the market will be receptive to this type of financing." When the facility was established in March 2003, the ability to increase the loan to $1.6 billion was built in, Price said. "It gives us the position to increase or enhance our liquidity position and also positions us with bank amendments to take first steps in the refinancing process for our bank debt," Price added.

Goodyear also announced plans to begin discussions with lenders to amend its credit facilities to allow for future transactions. "We are evaluating a variety of opportunities for refinancing our bank debt and will move forward as appropriate to continue to take advantage of the strong market and execute financing that supports our turnaround plan," Price said. Goodyear's contract with the United Steelworkers of America union requires the company to refinance its bank facilities by December (LMW, 10/6).

"We believe what we're doing are the first steps and we'll go forward to address our capital needs and be consistent with the agreements we made with the steelworkers," Price said. The new $300 million add-on is secured by the same assets as the asset-based facility, Price added.

  • 30 Jan 2004

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