S&P: Owens-Illinois outlook positive

Standard & Poor's said it revised its outlook on Owens-Illinois Inc. to positive from stable and affirmed its ratings, including the BB corporate credit rating.

The agency revised the recovery rating on the senior unsecured notes issued by subsidiary Owens-Brockway Glass Container Inc. to 4 from 3.

The outlook revision reflects the company's satisfactory business risk profile as the world's largest manufacturer of glass containers, its improving cost position and financial policies that could support a one-notch upgrade during the next several quarters, S&P said.

Offsetting these positives is currently slack demand, the agency said, although S&P believes this is temporary.

The change in the recovery rating on the Brockway notes reflects a reassessment of their relative position in the capital structure. The agency believes that this debt is structurally subordinated to the €300 million of notes issued by OI European Group BV. As a result, while the issue rating remains unchanged at BB, the recovery rating worsened to 4, denoting an expectation of average (30% to 50%) recovery, from 3, which indicated meaningful (50% to 70%) recovery.

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