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Best high-yield borrower

Goodyear Tire & Rubber
The US corporate showed how the secured lending market can provide liquidity when the high-yield market will not

Damon Audia,
assistant treasurer

GOODYEAR TIRE & RUBBER was in a lot of trouble in late 2003. The global tyre manufacturer had been downgraded to junk, its US operating business was struggling, it had a lot of debt maturities coming due, presenting short-term liquidity issues, and pension liabilities weighed heavily. Furthermore, all the company's debt was sitting in North America when it's operations are worldwide. Goodyear's capital structure reworking over the past 18 months has led to some solidly successful and innovative borrowing by the company, and it has also helped to make the concurrent turnround of the operating company a success.

"In 2003 we embarked on a plan which would allow us to first improve our liquidity and subsequently extend our maturities, giving us time to turn the operating business around," says Goodyear's senior vice-president and treasurer, Darren Wells, who in May was also promoted to oversee business development. "It has been a critical element in the turnaround of the company in which all levels of management were involved."

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