Research Update: The Goodyear Tire&Rubber Co. Rating Lowered To 'B+' Due To Pandemic Risk; Outlook Negative

In response to the COVID-19 pandemic, Akron, Ohio-based The Goodyear Tire&Rubber Co. suspended Americas and European manufacturing for the month of April. Moreover, the company reported today that sales in the first quarter of 2020 came in about $3 billion, down from $3.6 billion a year ago, and we expect that decline will worsen in the second quarter. While we believe that Goodyear's sales, profitability, and cash flow will be down significantly in 2020 compared with its results in 2019, we also think the company benefits from its strong liquidity and predominant exposure to the replacement tire business, which is generally more stable than its original equipment (OE) business. Therefore, we are lowering our issuer credit rating on

...- In response to the COVID-19 pandemic, Akron, Ohio-based The Goodyear Tire & Rubber Co. suspended Americas and European manufacturing for the month of April. Moreover, the company reported today that sales in the first quarter of 2020 came in about $3 billion, down from $3.6 billion a year ago, and we expect that decline will worsen in the second quarter. - While we believe that Goodyear's sales, profitability, and cash flow will be down significantly in 2020 compared with its results in 2019, we also think the company benefits from its strong liquidity and predominant exposure to the replacement tire business, which is generally more stable than its original equipment (OE) business. - Therefore, we are lowering our issuer credit rating on Goodyear to 'B+' from '##-'. The outlook is negative. - We are also lowering our issue-level ratings on its senior secured term loan to '##' from '##+' and on its unsecured notes to 'B+' from '##-'. - The negative outlook reflects our belief there is...

Research Update