Bank of East Asia was not able to find an acceptable bid for an $11 million piece of The Goodyear Tire & Rubber Co.'s U.S. term loan, leading to a failed auction. The bank was rumored to be looking for 95-96 for the piece. The market for the paper has been ticking up from the low 90s. By Wednesday, traders quoted the loan in the 941/2 953/4 context. "I don't know who the heck will be willing to buy [Goodyear's bank debt]," said one buysider, noting that "there's a lot of wood to chop." Goodyear has a $750 million U.S. revolver, a $645 million U.S. term loan, as well as a $650 million European credit, which the company restructured this spring. The tire maker also added a new $1.3 billion asset-backed line.
A Goodyear spokesman declined to comment on the bank debt. But he explained that the company is pursuing possible asset sales, including the sale of its chemical division. "We have a turnaround plan that takes us through 2005," he noted. Officials at Bank of East Asia could not be reached.