The Goodyear Tire & Rubber Company GT announced a private offering of senior notes due 2023 of €250 million (approximately $271.2 million) in total principal value by its European subsidiary, Goodyear Dunlop Tires Europe B.V. The notes will be senior unsecured obligations of the subsidiary and will be guaranteed by the parent company and some of its wholly-owned U.S. and Canadian subsidiaries.
Goodyear Dunlop will use the proceeds of the senior notes offering, along with cash and cash equivalents, to redeem in full its 6.75% senior notes due 2019, carrying aggregate principal value of €250 million (approximately $271.2 million).
Last month, Goodyear also announced a public offering of 8-year senior unsecured notes worth $1 billion, priced at 100% of their principal amount. These notes carry an interest rate of 5.125% per annum.
The offering was made to redeem its 8.25% senior notes due 2020 worth $1 billion in principal value.The notes were redeemed at 104.125% of their principal amount, plus accrued and unpaid interest as of Dec 7, 2015. The transactions will save interest expense of around $31 million in 2016 and beyond.
Goodyear is one of the largest tire manufacturing companies in the world. The company currently carries a Zacks Rank #3 (Hold). Better-ranked automobile stocks include General Motors Co. GM, O'Reilly Automotive Inc. ORLY and Fox Factory Holding Corp FOXF, all carrying a Zacks Rank #2 (Buy).
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