New Issue: Owens-Brockway prices upsized $900 million in two tranches

By Paul A. Harris

St. Louis, April 29 - Owens-Brockway Glass Container Inc. priced $900 million of notes in two tranches Tuesday, increasing the total size of the deal by $100 million from the originally planned amount, according to a syndicate source.

Owens-Brockway priced $450 million of senior secured notes due May 15, 2011 (B1/BB/BB) at par to yield 7¾%. Price talk was for a yield in the 7¾% area.

Deutsche Bank Securities Inc., Banc of America Securities and Citigroup were joint bookrunners on the senior secured tranche. Banc One Capital Markets, BNP Paribas, Fleet Securities, Goldman Sachs & Co. and Scotia Capital were co-managers.

The company also priced $450 million senior notes due May 15, 2013 (B2/B+/B+) at par to yield 8¼%. Price talk was for a yield 50 basis points behind the senior secured notes. The tranche was increased from $350 million.

Joint bookrunners were Deutsche Bank Securities, Banc One Capital Markets and Citigroup. The co-managers were Banc of America Securities, BNP Paribas, Credit Lyonnais, Fleet Securities, Goldman Sachs, and Scotia Capital.

The indirect wholly owned subsidiary of Owens-Illinois, Inc. will use proceeds from the Rule 144A offering to repurchase $300 million of Owens-Illinois' 7.85% senior notes due 2004 and permanently reduce its revolver which matures 2004.

Issuer:	Owens-Brockway Glass Container Inc.
Total amount:	$900 million (increased from $800 million)
Settlement date:	May 6, 2003 (T+5)
Senior Secured Tranche
Amount:	$450 million
Maturity:	May 15, 2011
Security description:	Senior secured notes
Bookrunners:	Deutsche Bank Securities, Bank of America Securities, Citigroup (joint)
Co-managers:	Banc One Capital Markets, BNP Paribas, Fleet Securities, Goldman Sachs, Scotia Capital
Coupon:	7¾%
Price:	Par
Yield:	7¾%
Spread:	420 basis points
Call features:	Callable on May 15, 2007 at 103.875, then at 102.583, 101.299, declining to par on May 15, 2010 and thereafter
Equity clawback:	Until May 15, 2006 for 35% at 107.75
Ratings:	Moody's: B1
	Standard & Poor's: BB
	Fitch: BB
Rule 144 Cusip:	69073TAF0
Price talk:	7¾% area
Senior Tranche
Amount:	$450 million (increased from $350 million)
Maturity:	May 15, 2013
Security description:	Senior notes
Bookrunners:	Deutsche Bank Securities, Banc One Capital Markets, Citigroup
Co-managers:	Banc of America Securities, BNP Paribas, Credit Lyonnais, Fleet Securities, Goldman Sachs, Scotia Capital
Coupon:	8¼%
Price:	Par
Yield:	8¼%
Spread:	432 basis points
Call features:	Callable on May 15, 2008 at 104.125, then at 102.75, 101.375, declining to par on May 15, 2011 and thereafter
Equity clawback:	Until May 15, 2006 for 35% at 108.25
Ratings:	Moody's: B2
	Standard & Poor's: B+
	Fitch: B+
Rule 144A Cusip:	69073TAG8
Price talk:	50 basis points behind the first tranches

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