AKRON (Feb. 1, 2008) — Effective March 3, Goodyear has called for the redemption of all its outstanding $650 million of senior secured notes that are due in 2011.
That action will result in annualized interest expense savings of about $75 million to $80 million, of which about $65 million will be realized in 2008, the Akron-based tire maker said.
The notes comprise $450 million of fixed-rate notes — currently bearing interest at 11.25 percent, according to the company — and $200 million of floating rate notes, which currently bear interest at London Interbank Offered Rate plus 825 basis points.
Damon Audia, Goodyear vice president and treasurer, said the notes are the tire maker's highest cost debt. "Eliminating them is another step in our debt reduction process and helps us move closer to achievement of our next stage metrics."
The company continues to evaluate other debt reduction opportunities, as well, he added.