Moody's rates Owens-Illinois loans Baa2

Moody's Investors Service said it assigned Baa2 (LGD2) ratings to Owens-Brockway Glass Container, Inc.’s proposed new $300 million senior secured revolving credit facility due 2020, $600 million senior secured multicurrency revolver due 2020, $600 million senior secured term loan due 2020 and $300 million delayed-draw senior secured term loan due 2020 and OI European Group BV’s $300 million (dollar equivalent) euro term loan due 2020.

Parent company Owens-Illinois Inc.'s Ba2 corporate family, Ba2-PD probability of default rating and other instrument ratings are unchanged. The outlook is stable.

Proceeds will be used to refinance existing debt and for general corporate purposes.

The agency said the Ba2 corporate family rating reflects Owens-Illinois' leading industry position, wide geographic footprint, continued focus on profitability rather than volume and improvements in credit metrics from debt reduction, cost-cutting/productivity and cost passthroughs.

The ratings are constrained by the company’s concentration of sales, asbestos liabilities, the mature state of the industry, the cyclical nature of glass packaging and lack of growth in developed markets, Moody’s said.

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