Fitch lowers Owens-Illinois

Fitch Ratings said it has downgraded Owens-Illinois' bank debt to B+ and senior secured notes to B following the announcement of its planned $1.5 billion acquisition of BSN Glasspack SA. Fitch has also downgraded Owens-Illinois' senior unsecured notes to CCC+ from B- and convertible preferred stock to CCC from CCC+ based on the deterioration in credit standing versus secured lenders as a result of pending and expected future financings.

The outlook is stable.

Fitch said the downgrades reflect the heightened debt load from the acquisition and the limited free cash flow available for delevering at the combined entity over the near term. Prior to the acquisition, Owens-Illinois had total debt of about $5.3 billion and was roughly break-even on a cash flow basis after asbestos payments.

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