Standard & Poor“s Ratings Services said 14 February 2008 that it raised its ratings on Owens-Illinois Inc. by one notch, including the corporate credit rating to “BB“ from “BB-“. The outlook is s…
Standard & Poor“s Ratings Services said 14 February 2008 that it raised its ratings on Owens-Illinois Inc. by one notch, including the corporate credit rating to “BB“ from “BB-“. The outlook is stable. “The upgrade follows the company“s improved operating results and better-than-expected free cash generation in 2007, which coupled with proceeds from the sale of its plastics packaging business resulted in about USD 1.9 billion of debt reduction in 2007”, said Standard & Poor credit analyst Liley Mehta. Credit measures have improved substantially with funds from operations to total debt (adjusted for capitalized operating leases, unfunded pension and other postretirement obligations, and asbestos liabilities) at 22% at year-end 2007. The improvements, together with management“s commitment to maintain improved credit metrics and adequate liquidity, should enable the company to hold on to a financial profile commensurate with the higher rating. Total debt (adjusted to include capitalized operating leases, unfunded postretirement liabilities, and asbestos liabilities) was about USD 4.8 billion at 31 December 2007. The ratings on Owens-Illinois and related entities reflect the company“s satisfactory business position and attractive profitability, offset by an improving, but still aggressive financial profile and concerns about its asbestos liability. In July 2007, the company sold its plastic packaging business to Rexam PLC for USD 1.82 billion, with sale proceeds used to repay senior secured notes maturing in 2009, 2011, and 2012.