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May 13, 2020 11:09 AM

Goodyear to issue senior notes valued at $600M

Tire Business Staff
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    AKRON — Goodyear is seeking to raise $600 million in capital through the issuance of five-year senior "unsecured obligation" notes that will mature in 2025.

    Goodyear said it plans to use the proceeds from the offering for general corporate purposes, which "may include" repaying or redeeming the company's outstanding 8.75% notes due to mature Aug. 15. Goodyear said there is approximately $282 million in aggregate principal amount of the 2020 notes outstanding.

    Pending the use of proceeds for this purpose, the tire maker said it may also apply a portion of the net proceeds from this offering to repay outstanding balances under the company's revolving credit facilities.

    The offering will be made under an effective shelf registration statement that was filed with the U.S. Securities and Exchange Commission and became effective on May 13.

    Goodyear has not yet published the yield for the notes, but said in the filing it would pay a dividend on them twice yearly.

    In the SEC filing, Goodyear stated it has $971 million of cash and cash equivalents on hand as well as $2.28 billion of unused availability under various credit agreements.

    Cash and cash equivalents increased by $63 million at year-end 2019 from year-end 2018 due primarily to net borrowings of $978 million, partially offset by cash used for operating activities of $561 million, capital expenditures of $211 million, and dividends paid of $37 million.

    Goodyear also noted in the filing that as of March 31, it had:

    • approximately $4.1 billion of senior indebtedness, approximately $1 billion of which was secured;
    • approximately $3.8 billion of senior indebtedness of "subsidiary guarantors," approximately $819 million of which was secured; and
    • approximately $2.3 billion of total indebtedness of "non-guarantor" subsidiaries.

    Goldman Sachs & Co. L.L.C.; Barclays Capital Inc.; BNP Paribas Securities Corp.; BofA Securities Inc.; Citigroup Global Markets Inc.; Credit Agricole Securities (USA) Inc.; Deutsche Bank Securities Inc.; J.P. Morgan Securities L.L.C.; and Wells Fargo Securities L.L.C. are acting as the joint book-running managers for the offering.

    BBVA Securities Inc.; Banco Bradesco BBI S.A.; MUFG Securities Americas Inc.; Natixis Securities Americas L.L.C.; PNC Capital Markets L.L.C.; SMBC Nikko Securities America Inc.; and UniCredit Capital Markets L.L.C. are acting as co-managers for the offering.

    The offering of the notes may be made only by means of a prospectus supplement and accompanying prospectus, copies of which may be obtained from: Goldman Sachs & Co. L.L.C., Prospectus Department, 200 West St., New York, N.Y. 10282. Telephone: 866-471-2526.

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