S&P ups Owens-Illinois outlook to stable

Standard & Poor's said it revised the outlook on Owens-Illinois Inc. to stable from negative.

The agency said it affirmed the BB- corporate credit, B unsecured debt and B- preferred stock ratings.

S&P added that the outlook revision follows the company's announcement that it has entered into a definitive agreement to sell its plastics packaging business to Rexam plc for a total consideration of about $1.82 billion, to be paid in cash at closing.

The agency said it expects an improvement in the company's financial profile, as Owens-Illinois intends to use the majority of the sale proceeds to repay senior secured notes maturing in 2009, 2011 and 2012.

At the same time, S&P said it placed its ratings on the company's senior secured credit facilities and notes on CreditWatch with positive implications, adding that the ratings affirmation on Owens-Illinois and related entities incorporates the expected improvement in the company's credit measures and debt maturity profile, assuming the transaction is completed as proposed.

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