Goodyear Tire & Rubber Co.'s second- and third-lien debt bounced back to 101 after falling half-a-point when the company drew down on its revolver Oct. 13. Its '09 bonds fell a point to 100 1/2. A trader said the company's recent decision to draw down on its revolver did not concern investors of Goodyear's unsecured debt. "People are trying to go long the bonds," he said.
Goodyear drew down $675 million under its JPMorgan-led $1.5 billion first-lien credit agreement. The credit line consists of a $1 billion revolver and a $500 million deposit-funded facility. Its revolver is now almost entirely drawn; it borrowed $300 million on Oct 5. It made the draws to provide additional cash in case its union, the United Steelworkers, continues to strike for an extended period of time. Union workers have been on strike since Oct. 5. A spokeswoman said the company has $25 million remaining on its revolver. She said the company can not speculate how long the strike will last, but said Goodyear is still serving customers from plants that have not been affected by the strike. She added there is still production occurring at plants where union workers are on strike and that the company continues to import from its international plants.