Moody's rates Owens-Illinois notes Ba2

Moody's Investors Service said it affirmed the Ba2 corporate family and probability of default ratings for Owens-Illinois, Inc. and assigned a Ba2 rating to the new €500 million of senior notes due 2020 issued by OI European Group BV, an indirect wholly-owned subsidiary of Owens-Illinois.

Also affirmed the company's $250 million senior unsecured notes due May 15, 2018 at B1 (LGD 6, 94%) and speculative grade liquidity rating at SGL-2.

The agency also affirmed Owens-Brockway Glass Container Inc.'s $900 million senior secured first-lien revolving credit facility due June 15, 2012 at Baa2 (LGD 1, 8% from 9%), $191 million senior secured first-lien term loan B due June 14, 2013 at Baa2 (LGD 1, 8% from 9%), €225 million senior unsecured notes due Dec. 1, 2014 at Ba3 (LGD 5, 78% from 73%), $1 billion senior unsecured notes due 2014-2016 at Ba3 (LGD 5, 78% from 73%), $690 million exchangeable senior unsecured notes due June 1, 2015 at Ba3 (LGD 5, 78% from 73%).

The agency also affirmed OI European Group BV (Netherlands)'s €191.5 million senior secured first-lien term loan D due June 14, 2013 at Baa2 (LGD 1, 8% from 9%) and €300 million senior unsecured notes due March 31, 2017 at Ba2 (LGD 3, 40% from 39%).

The agency also affirmed ACI Operations Pty. Ltd. and O-I Canada Corp.'s A$ 225 million senior secured first-lien term loan A due June 15, 2012 at Baa2 (LGD 1, 8% from 9%) and C$110.8 million senior secured first-lien term loan C due June 15, 2012 at Baa2 (LGD 1, 8% from 9%).

The outlook remains stable.

The rating comes after news that the company intends to offer the €500 million aggregate principal amount of senior notes due 2020 in a private offering.

The proceeds will be used to repay borrowings under Owens-Illinois Group's revolving credit facility and for general corporate purposes.

The ratings reflect pro-forma credit metrics that are in line with the rating category with the potential for further improvement over the horizon, Moody's said, and strong liquidity.

The rating also reflects the company's leading position in the industry, wide geographic footprint and focus on profitability rather than volume, the agency said.

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