| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant. |
Effective on September 28, 2018, Goodyear Dunlop Tires Europe B.V. (“GDTE”) and certain other European subsidiaries of The Goodyear Tire & Rubber Company (the “Company”) amended and restated the definitive agreements for the Company’span-European accounts receivable securitization facility (the “Facility”), extending the term through 2023. The Facility provides the flexibility to designate annually the maximum amount of funding available under the Facility in an amount of not less than €30 million and not more than €450 million. For the period from October 18, 2018 to October 17, 2019, the designated maximum amount of the Facility will be €320 million.
The Facility involves the ongoing daily sale of substantially all of the trade accounts receivable of certain subsidiaries of GDTE. These subsidiaries retain servicing responsibilities. Utilization under the Facility is based on eligible receivable balances.
The funding commitments under the Facility will expire upon the earliest to occur of: (a) September 26, 2023, (b) thenon-renewal and expiration (without substitution) of all of theback-up liquidity commitments, (c) the early termination of the Facility according to its terms (generally upon an Early Amortisation Event (as defined in the Facility), which includes, among other things, events similar to the events of default under the Company’s senior secured credit facilities; certain tax law changes; or certain changes to law, regulation or accounting standards), or (d) our request for early termination of the Facility. The Facility is subject to the customary renewal of itsback-up liquidity commitments, which expire on October 17, 2019.
The Facility has customary representations, warranties, covenants and Early Amortisation Events. In addition, it is an Early Amortisation Event under the Facility if GDTE’s ratio of Consolidated Net J.V. Indebtedness to Consolidated European J.V. EBITDA for a period of four consecutive fiscal quarters is greater than 3.00 to 1.00 at the end of any fiscal quarter. This financial covenant is substantially similar to the covenant included in the Company’s European Revolving Credit Agreement, as amended and restated on May 12, 2015.
Credit Agricole Corporate and Investment Bank and Natixis are the joint lead arrangers for the Facility. Currently, there areback-up liquidity commitments from Credit Agricole Corporate and Investment Bank and Natixis, and/or their respective conduits, to support €320 million of funding. Credit Agricole Corporate and Investment Bank and Natixis, and certain of their respective affiliates, have from time to time performed, and may in the future perform, banking, financial advisory and investment banking services for the Company and its affiliates.
