Goodyear Tire & Rubber Co. (GT: Quote) said that it called for redemption on March 29, 2012 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 (i) 107.875 percent of the principal amount being redeemed, plus (ii) 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 percent. In addition, holders will receive accrued and unpaid interest to March 29, 2012.
Goodyear stated that it intends to use the net proceeds from its $700 million offering of 7.0% senior notes due 2022, which closed today, 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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by RTT Staff Writer
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