Research Update: Goodyear Tire&Rubber Co. Upgraded To 'BB-' On Acquisition Of Cooper, Ratings Off CreditWatch Positive; New Debt Rated

Akron, Ohio-based The Goodyear Tire&Rubber Co. intends to issue $1.45 billion of senior unsecured notes and will use the proceeds, along with cash on the balance sheet and revolver availability, to complete its acquisition of Cooper Tire&Rubber Co. Pro forma for the acquisition, we expect Goodyear will maintain debt to EBITDA below 5x and will generate free operating cash flow (FOCF) to debt of at least 5% over the longer term. Therefore, we raised our issuer credit rating on Goodyear to 'BB-' from 'B+' and removed all ratings from CreditWatch with positive implications, where we placed them on Feb 23, 2021. We also assigned a 'BB-' issue-level rating and '4' recovery rating to Goodyear's proposed $1.45

...- Akron, Ohio-based The Goodyear Tire & Rubber Co. intends to issue $1.45 billion of senior unsecured notes and will use the proceeds, along with cash on the balance sheet and revolver availability, to complete its acquisition of Cooper Tire & Rubber Co. - Pro forma for the acquisition, we expect Goodyear will maintain debt to EBITDA below 5x and will generate free operating cash flow (FOCF) to debt of at least 5% over the longer term. - Therefore, we raised our issuer credit rating on Goodyear to '##-' from 'B+' and removed all ratings from CreditWatch with positive implications, where we placed them on Feb 23, 2021. - We also assigned a '##-' issue-level rating and '4' recovery rating to Goodyear's proposed $1.45 billion senior unsecured notes due 2029 and 2031. We raised our issue-level rating on its second-lien secured debt to '##+' from '##' and the rating on its senior unsecured notes to '##-' from 'B+' - Our stable outlook reflects our view that Goodyear will continue to recover...

Research Update