S&P cuts Owens-Brockway notes, rates Owens-Illinois loan BBB

Standard & Poor's said it assigned its BBB senior secured debt rating and 1 recovery rating to Owens-Illinois Inc.'s proposed $2.1 billion five-year senior secured credit facility.

These ratings indicate the agency’s expectation for very high (90% to 100%) recovery in the event of a payment default.

Proceeds will be used to refinance borrowings under Owens-Illinois’ existing credit facility and refinance upcoming debt maturities.

At the same time, S&P lowered its issue rating on the senior unsecured notes issued by Owens-Brockway Glass Container Inc. to BB from BB+ based on a revision in the recovery rating to 5 from 4. The 5 recovery rating indicates our expectation for modest (10% to 30%; in the lower half of the range) recovery in the event of a payment default.

This change reflects lower recovery prospects due to the proposed increase in secured debt.

The outlook is stable.

All other existing ratings on Owens-Illinois and its subsidiaries, including the BB+ corporate credit rating, were affirmed.

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