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Goodyear commences senior note exchange offer

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Goodyear Tire & Rubber Co. has commenced an offer to exchange any and all of its outstanding 4% convertible senior notes due June 15, 2034, for a cash premium and shares of common stock.

"This exchange offer is another step in our plan to further de-lever and improve our capital structure," says W. Mark Schmitz, Goodyear's executive vice president and chief financial officer.

"This allows us to reduce our debt by as much as $350 million, save up to $14 million a year in interest, and simplify our balance sheet."

The exchange offer allows holders of convertible notes to receive the same number of shares of the company's common stock as they would receive upon conversion of the convertible notes, in accordance with their current terms, plus a cash premium and accrued and unpaid interest.

For each $1,000 principal amount of convertible notes validly tendered, note holders will receive 83.0703 shares of the company's common stock, which represents a conversion price of approximately $12.04 per share.

In addition, per each $1,000 principal amount of convertible notes, the company will offer note holders a cash payment of $48.30, as well as accrued and unpaid interest up to, but excluding, the exchange date.

The offer is scheduled to expire at 5 p.m., EST, on Dec. 5, 2007. As of Nov. 6, there was $349,798,000 in principal amount of convertible notes outstanding, according to Goodyear officials.

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