Owens-Illinois pricing $1 billion two-part bullet notes on Tuesday

By Paul A. Harris

Portland, Ore., Aug. 11 – Owens-Brockway Glass Container Inc., a wholly owned subsidiary of Owens-Illinois, Inc., plans to price $1 billion of non-callable senior notes in two tranches on Tuesday following a mid-morning conference call with investors, according to market sources.

The deal includes eight-year notes, which are coming with initial yield guidance in the 6% area, and 10-year notes with initial guidance in the 6 3/8% area.

Tranche sizes remain to be determined.

Deutsche Bank Securities Inc., BofA Merrill Lynch, BNP Paribas Securities Corp., Credit Agricole CIB, Goldman Sachs & Co., J.P. Morgan Securities LLC and Scotia Capital are the joint bookrunners for the Rule 144A and Regulation S for life deal.

Barclays, HSBC Securities and Rabo Securities are the co-managers.

The notes feature a make-whole call at Treasuries plus 50 basis points but are otherwise non-callable.

The Perrysburg, Ohio-based glass container manufacturer plans to use the proceeds to help fund its acquisition of the food and beverage glass containers business of Vitro, SAB de CV and its subsidiaries as conducted in the United States, Mexico and Bolivia.

At the close of the acquisition Moody’s Investors Service is expected to assign its B1 rating to the notes, according to a market source. Standard & Poor's is expected to rate the notes BB-.

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