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Moody's rates Owens Illinois notes Ba3
Moody's Investors Service said it upgraded the corporate family rating and probability of default rating of Owens-Illinois, Inc. to Ba2 from Ba3 and its $500 million senior unsecured notes and debentures ($288 million outstanding) due in 2010 and 2018 to B1 (LGD 6, 94%) from B2 (LGD 6, 93%). Its speculative grade liquidity rating was affirmed at SGL-2.
The agency also said it assigned a Ba3 rating to the new $500 million exchangeable senior unsecured notes due 2015. The notes are issued by Owens-Brockway Glass Container, Inc. and the proceeds will be used for general corporate purposes, including acquisitions and debt reduction. The agency also upgraded $900 million senior secured first-lien revolving credit facility maturing June 15, 2012 to Baa2 (LGD 1, 9%) from Baa3 (LGD 2, 10%), $200 million senior secured first-lien term loan B due June 12, 2013 to Baa2 (LGD 1, 9%) from Baa3 (LGD 2, 10%), and affirmed its €225 million senior unsecured notes due Dec. 1, 2014 at Ba3 ( LGD 5, 73%, from LGD 4, 59%) and $1.45 billion senior unsecured notes due 2013 and 2016 at Ba3 (LGD 5, 73% from LGD 4, 59%) and $500 million exchangeable senior unsecured notes due 2015 at Ba3 (LGD 5, 73%).
The outlook remains stable.
The upgrades reflect credit metrics that are in line with the rating category with the potential for further improvement over the rating horizon and strong liquidity, Moody's said.
The ratings reflect the company's leading position in the industry, wide geographic footprint and focus on profitability rather than volume, the agency said.
The ratings are constrained by concentration of sales, potential acquisition risk and the asbestos liabilities, Moody's said.
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