Lender demand has led to an increase in the size of The Goodyear Tire & Rubber Co.'s add-on term loan from $300 million to $650 million. The new loan is being added to the company's existing $1.3 billion asset-based credit facility (LMW, 2/2). J.P. Morgan and Citibank, the incumbent leads, are leading the latest financing. Price talk on the facility is LIBOR plus 41/4%.
When the facility was originated in March 2003, it allowed for increases to $1.6 billion. Amendments will now have to be made to increase the facility to $1.95 billion. "We do need to have an amendment discussion about it but it doesn't appear to be a significant issue," said Keith Price, a Goodyear spokesman.
Proceeds of the loan will be used to partially repay Goodyear's existing term loan. The loan will be used to pay down some facilities that are coming due in 2005 and 2006, Price said.