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Goodyear plans to redeem $650 million in notes

Order Reprints

On March 29, 2012, Goodyear Tire & Rubber Co. will redeem all of its outstanding $650 million 10.5% senior unsecured notes due 2016.

The redemption price will be the present value at the redemption date of:

1. 107.875% of the principal amount being redeemed, plus

2. the amount of the interest payment scheduled for May 15, 2012 less accrued and unpaid interest to March 29, 2012, computed using a discount rate equal to the yield of a comparable U.S. Treasury security plus 0.50%.

In addition, holders will receive accrued and unpaid interest to March 29, 2012.

Goodyear says it intends to use the net proceeds from its $700 million offering of 7% senior notes due 2022, which closed today (Feb. 28, 2012), together with current cash and cash equivalents for the redemption.

The transactions will result in interest expense savings of approximately $25 million in 2013. Goodyear continues to expect interest expense to range between $360 million and $385 million for 2012.

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