Moody“s Investors Service downgraded the ratings for senior unsecured notes and convertible preferred stock of US-based packaging manufacturer Owens-Illinois following the firm“s announcement that i…
Moody“s Investors Service downgraded the ratings for senior unsecured notes and convertible preferred stock of US-based packaging manufacturer Owens-Illinois following the firm“s announcement that it has entered into exclusive negotiations to acquire BSN Glasspack, SA, the second largest glass container manufacturer in Europe. Total consideration is about EUR 1.2 billion (about USD 1.5 billion) including the assumption of debt. Among other ratings revisions, Owens-Illinois“ USD 1.4 billion senior unsecured notes were downgraded from B3 to Caa1. The ratings outlook is stable, Moody“s said. “The ratings reflect weak consolidated credit metrics pro-forma for the proposed transactions,” Moody“s said. “Concern remains regarding the susceptibility of margins to rising natural gas and resin costs and to adverse effects of weather on volume in certain geographies…[T]hese issues are exacerbated by challenging operating environments and soft results in both North American Glass and Plastics (combined accounting for over 40% of pro-forma EBIT).”