Goodyear Tire To Save $14 Million From Interest Costs

The Goodyear Tire & Rubber Company GT disclosed Friday it would be saving approximately $14 million from interest expenses on an annualized basis. According to the company, the gains would come from the redemption of all of its outstanding $900 million in principal amount of 6.5 percent senior notes due 2021 on June 13 this year.

Goodyear said the redemption price would be 104.875 percent of the principal amount of the notes being redeemed. In addition, it would pay accrued, as well as the unpaid interest until June 13, 2016.

Interestingly, the company closed its $900 million offering of 5.0 Senior Notes due 2026. It plans to use the proceeds to fund the redemption. The company would also use its current cash and cash equivalents to redeem the notes.

Despite estimating a saving from the interest expenses, the company said it continued to see interest expense to range between $350 million and $375 million for the current year.