AKRON (Aug. 18, 2004) — Goodyear has closed a $680 million senior secured funded credit facility, refinancing a seperate facility.
The new credit package, which matures in September 2007, refinances the company's $680 million U.S. revolving credit facility, which would have matured on April 30, 2005. Goodyear said the new facility is secured by the same collateral that had secured the previous one. The new facility will be used by the Akron-based tire maker on an as-needed basis to support letters of credit or for borrowings on a revolving basis, and it also will initially support already existing letters of credit.
Goodyear had announced its plans to refinance the $680 million senior secured U.S. revolving credit facility with a $500 million facility on July 21. Lender demand was sufficient to increase it to $680 million, the company said. Lenders in the new facility will receive annual compensation equivalent to 4.5 percent over London Interbank Offered Rate (LIBOR), a benchmark for short-term interest rates.
“Improving our credit profile is a key component of the company's turnaround strategy,” said Richard Kramer, executive vice president and chief financial officer. “This includes refinancings to extend maturities, potential asset sales and, ultimately, increased equity funding.”