Goodyear to issue senior notes to raise $600m

Akron, Ohio – Goodyear is seeking to raise $600 million (€555 million) in capital through the issuance of five-year senior "unsecured obligation" notes that will mature in 2025.

In an SEC filing 13 May, 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 15 Aug. 

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 US Securities and Exchange Commission and became effective on 13 May.

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.