Standard & Poor's Ratings Services lowered ratings on certain senior unsecured Goodyear Tire & Rubber Co. debt from BB- to B+. It also removed the ratings from CreditWatch.
The company also affirmed its BB- corporate credit rating -- and negative outlook for Goodyear.
The downgrade on the senior unsecured notes follows Goodyear's announcement that it is replacing a total of $2.94 billion in financing with $3.3 billion in credit facilities ("Goodyear completes negotiations with its lenders," April 1, 2003). Goodyear has about $5 billion of total debt outstanding, according to S&P.
"We are concerned that material improvement in financial performance could be delayed, and that financial flexibility will erode if management's turnaround plan fails to make substantial progress over the next year," says Martin King, Standard & Poor's credit analyst.
Goodyear says the S&P ratings announcement "is consistent with the agency's March 20 annoucement."
Goodyear says the new credit agreements "will provide the company with additional flexibility and liquidity as it executes a turnaround of its North American Tire business."
