Owens-Illinois to launch about $2 billion credit facility on May 7

By Sara Rosenberg

New York, April 25 - Owens-Illinois Inc. is scheduled to launch a new credit facility sized at approximately $2 billion on May 7, according to a syndicate source. Deutsche Bank and Bank of America are the lead banks on the deal.

The loan is expected to contain about $1.3 billion to $1.4 billion of pro rata paper comprised of a term loan A and a revolver with price talk of Libor plus 325 basis points.

In addition, there will be a term loan B that is expected to be sized from $600 million to $700 million with price talk of Libor plus 350 to 375 basis points, the source said.

Proceeds will be used to refinance the company's existing debt.

Meanwhile, Owens-Brockway Glass Container, Inc., a wholly-owned subsidiary of Owens-Illinois, has already begun a roadshow for $450 million of senior secured notes due 2011, non-callable for four years, and $350 million of senior notes due 2013, non-callable for five years. The notes are expected to price on April 30. Deutsche Bank Securities Inc. and Banc of America Securities are joint bookrunners on the Rule 144A deal.

Proceeds will be used to repurchase $300 million of Owens-Illinois' 7.85% senior notes due 2004 and permanently reduce the revolver of the secured credit facility, which matures March 31, 2004.

Owens-Illinois is a Toledo, Ohio manufacturer of packaging products.

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