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Fitch Rates Owens-Brockway Glass' $300MM Senior Unsecured Notes 'BB+'

Post Time:May 09,2009Classify:Company NewsView:847

Fitch Ratings has assigned a 'BB+' rating to Owens-Brockway Glass Container Inc.'s offering of $300 million 7 3/8% senior unsecured notes due 2016. The proceeds will be used for the repayment of Owens-Illinois, Inc.'s $250 million of 7 1/2% debentures due May 2010 and for general corporate purposes. The Rating Outlook is Stable.

Owens-Illinois' 'BB' Issuer Default Rating (IDR) and Stable Outlook is supported by the company's good financial flexibility, leading market positions, its strengthened credit profile, improved cost structure, global footprint, technology leadership and long-term customer relationships with large, stable customers. Rating concerns include the limited visibility on the business outlook, reduced global demand impacting volume, a substantial portion of sales being derived from mature markets and to a lesser extent, the asbestos liabilities. Free cash flow levels for 2009 will also be lower as a result of cash restructuring payments including investments for capital spending.

Owens-Illinois' liquidity is solid at approximately $1 billion for the end of first quarter-2009, which consists of $642 million of availability under its $900 million senior secured first lien revolving credit facility due June 2012 and $362 million of cash. Owens-Illinois may upsize the offering, which would provide added liquidity. Near-term maturities are relatively modest over the next two years as Owens-Illinois has fully addressed refinancing requirements for 2010. Amortization of Owens-Illinois' bank debt has been prepaid through December 2010 and no quarterly payments will be required until 2011.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site,

Source: Fitch RatingsAuthor: shangyi

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