Goodyear Announces Pricing Of $500 Million Of Senior Notes

Rhea-AI Summary

Goodyear Tire & Rubber Company (NASDAQ: GT) has announced the pricing of $500 million in 5-year senior notes at a 6.625% interest rate. The notes, priced at 100% of principal amount, are expected to close on June 3, 2025. The company plans to use the proceeds, along with existing cash and proceeds from the Dunlop brand disposition, to fully redeem its outstanding $900 million 5.000% Senior Notes due 2026. A notice of redemption for $400 million of the 2026 Notes has been issued, with redemption scheduled for June 30, 2025. The offering is supported by multiple financial institutions acting as joint book-running managers, senior co-managers, and co-managers.

Positive

• Refinancing of debt at competitive rate in current market conditions
• Strategic use of Dunlop brand disposition proceeds for debt reduction
• Full redemption of 2026 Notes indicates proactive debt management

Negative

• Higher interest rate on new notes (6.625%) compared to existing 2026 Notes (5.000%)
• Additional debt burden with $500 million new notes issuance

Insights

Corporate Finance Specialist

Goodyear's $500M notes offering allows efficient debt restructuring by replacing higher-cost debt with better terms, improving financial flexibility.

Goodyear's $500 million senior notes offering at 6.625% represents a strategic debt refinancing initiative worth analyzing closely. The company is using these proceeds, combined with cash on hand, to redeem its $900 million in 5.000% Senior Notes due 2026. While the new notes carry a higher interest rate (6.625% vs 5.000%), this proactive refinancing deserves attention for several reasons.

The transaction effectively extends Goodyear's debt maturity profile by replacing 2026 maturities with obligations due in 2030, reducing near-term refinancing pressure. Additionally, $400 million of the 2026 Notes will be redeemed using proceeds from their Dunlop brand disposition, revealing a disciplined approach to debt reduction through asset sales.

This refinancing comes amid a challenging high interest rate environment where companies face difficult trade-offs. Despite accepting a higher coupon rate, Goodyear likely calculated that securing longer-term financing now outweighs the increased interest expense, particularly if they anticipate continued rate volatility or potential market access issues closer to the 2026 maturity.

The substantial syndicate of underwriters (including major institutions like Deutsche Bank, BofA Securities, and Goldman Sachs) suggests strong market reception. This broad distribution network reduces placement risk and indicates institutional confidence in Goodyear's credit profile despite industry headwinds.

For investors, this refinancing demonstrates management's proactive approach to liability management while providing insights into their "Goodyear Forward" strategic initiatives mentioned in the forward-looking statements. The company is effectively trading some increased interest costs for enhanced financial flexibility and reduced near-term refinancing risk, a sensible trade-off in the current market environment.

AKRON, Ohio, May 29, 2025 /PRNewswire/ -- The Goodyear Tire & Rubber Company (NASDAQ: GT) ("Goodyear" or the "company") today announced that it has priced its offering of $500 million aggregate principal amount of 5-year senior notes (the "notes"). The notes will be senior unsecured obligations of the company.

The notes will be offered to the public at a price of 100% of their principal amount and will bear interest at a rate of 6.625% per annum. Goodyear expects the offering to close on June 3, 2025, subject to customary closing conditions.

Goodyear intends to use the net proceeds from this offering, together with its current cash and cash equivalents, to redeem in full the company's remaining 5.000% Senior Notes due 2026 (the "2026 Notes").  Currently, there is $900 million in aggregate principal amount of the 2026 Notes outstanding.  On May 29, 2025, the company issued a notice of redemption to the holders of the 2026 Notes for $400 million of the 2026 Notes, which we intend to fund using a portion of the cash proceeds from the Dunlop brand disposition. The redemption date for the redemption of the $400 million of 2026 Notes is June 30, 2025. This press release does not constitute a notice of redemption under the optional redemption provisions of the indenture governing the 2026 Notes.

Deutsche Bank Securities Inc.; BofA Securities, Inc.; BNP Paribas Securities Corp.; Citigroup Global Markets Inc.; Credit Agricole Securities (USA) Inc.; Fifth Third Securities, Inc.; Goldman Sachs & Co. LLC; J.P. Morgan Securities LLC; MUFG Securities Americas Inc.; PNC Capital Markets LLC; CIBC World Markets Corp.; and RBC Capital Markets, LLC are acting as the joint book-running managers for the offering. Capital One Securities, Inc.; Huntington Securities, Inc.; Regions Securities LLC; Santander US Capital Markets LLC; and Wedbush Securities Inc. are acting as senior co-managers for the offering. Citizens JMP Securities, LLC; HSBC Securities (USA) Inc.; KeyBanc Capital Markets Inc.; Standard Chartered Bank; U.S. Bancorp Investments, Inc.; and WauBank Securities LLC are acting as co-managers for the offering.

The offering was made under an effective shelf registration statement that was filed with the U.S. Securities and Exchange Commission and became automatically effective on May 29, 2025 and as may be further amended from time to time. The offering of the notes may be made only by means of a prospectus supplement and accompanying prospectus, copies of which may be obtained from:

Deutsche Bank Securities Inc.		The Goodyear Tire & Rubber Company
Attn: Prospectus Group		Investor Relations Department
1 Columbus Circle		200 Innovation Way
New York, New York 10019		Akron, OH 44316
Email: prospectus.ops@db.com		Telephone: 330-796-3751

This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

Goodyear is one of the world's largest tire companies. It employs about 68,000 people and manufactures its products in 53 facilities in 20 countries around the world. Its two Innovation Centers in Akron, Ohio, and Colmar-Berg, Luxembourg, strive to develop state-of-the-art products and services that set the technology and performance standard for the industry.

Certain information contained in this press release constitutes forward-looking statements for purposes of the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. There are a variety of factors, many of which are beyond our control, that affect our operations, performance, business strategy and results and could cause our actual results and experience to differ materially from the assumptions, expectations and objectives expressed in any forward-looking statements. These factors include, but are not limited to: our ability to implement successfully the Goodyear Forward plan and our other strategic initiatives, including the sale of our chemical business; risks relating to the ability to consummate the sale of our chemical business on a timely basis or at all, including failure to obtain the required regulatory approvals or to satisfy the other conditions to closing the transaction; actions and initiatives taken by both current and potential competitors; increases in the prices paid for raw materials and energy; inflationary cost pressures; delays or disruptions in our supply chain or the provision of services to us; a prolonged economic downturn or period of economic uncertainty; deteriorating economic conditions or an inability to access capital markets; a labor strike, work stoppage, labor shortage or other similar event; financial difficulties, work stoppages, labor shortages or supply disruptions at our suppliers or customers; the adequacy of our capital expenditures; changes in tariffs, trade agreements or trade restrictions; foreign currency translation and transaction risks; our failure to comply with a material covenant in our debt obligations; potential adverse consequences of litigation involving the company; as well as the effects of more general factors such as changes in general market, economic or political conditions or in legislation, regulation or public policy. Additional factors are discussed in our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, any forward-looking statements represent our estimates only as of today and should not be relied upon as representing our estimates as of any subsequent date. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates change.

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SOURCE The Goodyear Tire & Rubber Company

FAQ

What is the interest rate and size of Goodyear's (GT) new senior notes offering?

Goodyear's new senior notes offering is for $500 million with an interest rate of 6.625% per annum, priced at 100% of principal amount.

How will Goodyear (GT) use the proceeds from the $500 million notes offering?

Goodyear will use the proceeds, along with existing cash and Dunlop brand disposition proceeds, to redeem its outstanding $900 million 5.000% Senior Notes due 2026.

When will Goodyear's (GT) new $500 million senior notes offering close?

The notes offering is expected to close on June 3, 2025, subject to customary closing conditions.

What is the redemption date for Goodyear's (GT) 2026 Notes?

Goodyear has set June 30, 2025, as the redemption date for $400 million of the 2026 Notes.