Owens-Illinois: rating for bank facilities

Standard & Poor“s Ratings Services has assigned its “BB-“ rating and its recovery rating of “2“ to the proposed Owens-Illinois USD 1.5 billion senior secured credit facilities, based on prelimina…

Standard & Poor“s Ratings Services has assigned its “BB-“ rating and its recovery rating of “2“ to the proposed Owens-Illinois USD 1.5 billion senior secured credit facilities, based on preliminary terms and conditions. The rating on the proposed credit facilities is the same as the corporate credit rating; in the event of a payment default lenders can expect substantial (80% to 100%) recovery of principal. Proceeds from the new credit facilities will be used to repay the outstanding amount under the existing credit facilities. At the same time, Standard & Poor“s assigned its recovery rating of “2“ to the existing USD 2.08 billion senior secured notes of Owens-Brockway Glass Container, a wholly-owned subsidiary of Owens Illinois. The senior secured notes are rated “BB-“. The corporate credit rating on Owens-Illinois is “BB-“. The rating outlook is negative. Toledo, Ohio-based Owens-Illinois“ total debt was USD 5.3 billion as of 31 December 2005. “The ratings on Owens-Illinois and related entities reflect its highly leveraged financial profile, subpar credit measures, and meaningful concerns regarding its asbestos liability. These factors are partially offset by a satisfactory business position and attractive profitability”, said Standard & Poor“s credit analyst Liley Mehta.