AKRON (Feb. 4, 2004)—Goodyear intends to more than double the amount of a new loan package announced in late January, to $650 million, and will proceed with refinancing loans put in place only last year.
Goodyear said the new term loan, being arranged by JPMorgan Chase & Co. and Citigroup Inc., would be in addition to a $1.3 billion asset-based credit facility arranged last year as part of a larger package negotiated to replace $2.94 billion in financing with $3.3 billion in credit facilities.
The proceeds of the new loan would be used to repay partially Goodyear's existing U.S. term loan, to repay other indebtedness and for general corporate purposes, the company said. The consummation of the loan will be subject to some conditions, including getting the consent of the lenders holding a majority of the commitments under that credit facility, Goodyear said.
Goodyear is discussing with the lenders under its senior secured credit facilities an amendment of those facilities to allow for the $650 million term loan and future capital markets transactions. The parties also are discussing providing the new term loan and the $1.3 billion credit facility with a junior lien on certain of the collateral securing the company´s other senior secured U.S. credit facilities.
“This (expanded loan) allows us to begin refinancing the loans put in place last year and further position the company to access capital markets going forward,” said Robert W. Tieken, executive vice president and chief financial officer.