| Item 1.01 | Entry into a Material Definitive Agreement. |
Indenture and Notes
On May 18, 2021, The Goodyear Tire & Rubber Company (the “Company”) issued $850,000,000 in aggregate principal amount of its 5.000% Senior Notes due 2029 (the “2029 Notes”) and $600,000,000 in aggregate principal amount of its 5.250% Senior Notes due 2031 (the “2031 Notes” and together with the 2029 Notes, the “Notes”). The Notes are guaranteed, jointly and severally, on an unsecured basis, by the Company’s wholly owned U.S. and Canadian subsidiaries that also guarantee the Company’s obligations under certain of its senior secured credit facilities and senior unsecured notes (the “Subsidiary Guarantors”).
The Notes were offered and sold pursuant to an exemption from the registration requirements under the Securities Act of 1933, as amended (the “Securities Act”). The Notes were offered and sold only to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act, and outside the United States to persons other than U.S. persons in reliance on Regulation S under the Securities Act.
The Notes were issued pursuant to the Indenture, dated as of August 13, 2010 (the “Base Indenture”), among the Company, the Subsidiary Guarantors and Wells Fargo Bank, N.A., as trustee (the “Trustee”), as supplemented by a Tenth Supplemental Indenture, in respect of the 2029 Notes, dated as of May 18, 2021 (the “Tenth Supplemental Indenture”), and an Eleventh Supplemental Indenture, in respect of the 2031 Notes, dated as of May 18, 2021 (the “Eleventh Supplemental Indenture”) (the Base Indenture, as supplemented by the Tenth Supplemental Indenture with respect to the 2029 Notes and as supplemented by the Eleventh Supplemental Indenture with respect to the 2031 Notes, as applicable, the “Indenture”), among the Company, the Subsidiary Guarantors and the Trustee.
The Tenth Supplemental Indenture and the Eleventh Supplemental Indenture together are referred to in this Current Report on Form 8-K as the “Supplemental Indentures.” The Indenture provides, among other things, that the Notes are senior unsecured obligations of the Company and rank equally with all of the Company’s other senior unsecured and unsubordinated debt.
Interest is payable on the Notes on January 15 and July 15 of each year, beginning on January 15, 2022. The 2029 Notes will mature on July 15, 2029, and the 2031 Notes will mature on July 15, 2031. The Company has the option to redeem some or all of the Notes at any time or from time to time prior to their maturity. If the Company elects to redeem (i) the 2029 Notes prior to April 15, 2029 or (ii) the 2031 Notes prior to April 15, 2031, the Company will pay a redemption price in respect of the Notes to be redeemed equal to the greater of 100% of the aggregate principal amount of the Notes redeemed or the sum of the present values of the remaining scheduled payments of principal and interest on the Notes redeemed (as if the 2029 Notes matured on April 15, 2029 and the 2031 Notes matured on April 15, 2031), discounted using a defined treasury rate plus 50 basis points, plus in either case accrued and unpaid interest to the redemption date, if any. If the Company elects to redeem (i) the 2029 Notes on or after April 15, 2029 or (ii) the 2031 Notes on or after April 15, 2031, the Company will pay a redemption price in respect of the Notes to be redeemed equal to 100% of the aggregate principal amount of the Notes redeemed plus accrued and unpaid interest to the redemption date, if any. The optional redemption provisions are set forth in the Supplemental Indentures and the applicable Notes.
The terms of the Indenture, among other things, limit the ability of the Company and certain of its subsidiaries to (i) incur certain liens, (ii) enter into certain sale/leaseback transactions and (iii) consolidate, merge, sell or otherwise dispose of all or substantially all of their assets. These covenants are subject to a number of important exceptions and qualifications set forth in the Supplemental Indentures. Also, if the Notes of a series are assigned an investment grade rating by at least two of Moody’s Investors Service, Inc., S&P Global Ratings and Fitch Ratings, Inc., and no default has occurred and is continuing, the Company may elect to suspend the guarantees with respect to such Notes.
The Indenture provides for customary events of default that include (subject in certain cases to customary grace and cure periods), among others: nonpayment of principal or interest, breach of certain covenants or other agreements in the Indenture, defaults in or failure to pay certain other indebtedness or certain judgments and certain events of bankruptcy or insolvency. Generally, if an event of default occurs, the Trustee or the holders of at least 25% in principal amount of the then-outstanding Notes of the applicable series may declare the principal of and the accrued but unpaid interest on all of the Notes of such series to be due and payable. In addition, if the Company experiences
