Moody's rates Owens-Illinois note B3

Moody's Investors Service said it assigned a B3 rating to OI European Group BV's new €300 million senior unsecured notes and affirmed the B2 corporate family rating of parent company Owens-Illinois, Inc.

The outlook is stable.

The notes proceed will be used to repay revolving debt, which will then be used to fund the redemption of Owens-Illinois' $300 million 8.1% senior unsecured notes at maturity, May 15, 2007.

The agency said the B2 corporate family rating is constrained by weak free cash flow over the past two fiscal years and the large debt maturities in the intermediate term.

The ratings are supported by Owens-Illinois' size and scale as measured by revenue, its leading market position and Moody's expectation that the company's new strategic initiatives will have a positive impact on the company.

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