Goodyear gets tenders for 99% of notes in exchange offer for 4% convertibles

By Jennifer Chiou

New York, Dec. 6 - Goodyear Tire & Rubber Co. said it received tenders from holders of about $346 million, or about 99%, of notes in the exchange offer for any and all of its $349.8 million of 4% convertible senior notes due June 15, 2034.

The offer ended at 5 p.m. ET on Dec. 5.

Tendering holders received 28.7 million shares as well as a cash premium of about $23 million.

As previously reported, the exchange offer allowed holders of convertible notes to receive the same number of shares of the company's stock as they would receive upon conversion of the convertible notes, plus a cash premium and accrued and unpaid interest.

The notes are convertible at a rate of 83.0703 shares per $1,000 principal amount, which is equal to a conversion price of $12.04 per share.

For each $1,000 principal amount, holders also received a cash payment of $48.30 as well as accrued interest up to, but excluding, the exchange date.

"This successful exchange offer eliminates approximately $346 million in debt from our balance sheet and reduces our annual interest expense by approximately $14 million," said W. Mark Schmitz, executive vice president and chief financial officer, in a news release.

On Oct. 16, the company said that the notes will remain convertible through Dec. 31.

As previously reported, the notes became convertible into cash or shares because the last reported sale price of the company's common stock for at least 20 trading days during the 30 consecutive trading-day period ended on Oct. 15, the 11th trading day of the current quarter, was greater than 120% of the conversion price.

The exchange agent was Wells Fargo Bank, NA (800 344-5128). The dealer manager was Goldman, Sachs & Co. (800 828-3182).

Goodyear is an Akron, Ohio-based tire manufacturer.

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