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Moody's rates Owens-Brockway loan B1
Moody's Investors Service assigned a B1 rating to the proposed $1.9 billion secured credit facility of Owens-Brockway Glass Container Inc. and confirmed Owens-Brockway and parent Owens-Illinois, Inc.'s ratings including their senior secured notes at B1, senior unsecured notes at B2 and perpetual convertible preferred stock at Caa1. The outlook is stable.
Moody's said the B1 rating on the loan reflects its seniority in the capital structure and ample collateral coverage.
All the debt ratings for Owens-Illinois and Owens-Brockway continue to reflect solid profitability and industry leadership tempered by its sizable consolidated debt burden and minimal free cash flow adjusted to include mandatory asbestos payments.
Thin coverage of interest expense, high capital investment, no tangible equity and soft performance throughout its businesses further constrain the ratings.
Moody's said liquidity pro-forma for the refinancing remains adequate and continued access to bank financings is anticipated throughout the intermediate term.
S&P rates Semco notes BBB-
Standard & Poor's assigned a BBB- rating to Semco Energy Inc.'s proposed $300 million senior unsecured notes due 2008 and 2013. The outlook remains negative.
S&P said the note transaction will improve Semco's debt maturity profile over the near term.
With the exception of the company's bank credit facility, SEMCO will face only $15 million of debt maturities through 2007.
Eliminating refinancing risk markedly strengthens the company's liquidity position and allows management to focus more closely on underlying business operations, S&P said.
The company's gas distribution operations benefit from strong business fundamentals. However, unseasonably warm weather, along with elevated debt leverage, have produced financial measures that remain below suitable levels for Semco's current rating, S&P said.
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