Moody’s assigns OI notes B1

Moody’s Investors Service said it assigned a B1 rating to OI European Group BV's planned $400 million of senior unsecured notes offering maturing 2030. The agency also upgraded the speculative grade liquidity rating to SGL-1 from SGL-2. Finally, Moody's revised the outlook to positive from stable and affirmed Owens-Illinois Group Inc.’s B1 corporate family and B1-PD probability of default ratings.

Moody's also affirmed the B1 rating on the OI European’s notes and the B3 rating on the senior unsecured notes at subsidiary Owens-Brockway Glass Container, Inc.

The proceeds will be used to redeem all the outstanding 4% senior unsecured notes due 2023, repay a portion of borrowings outstanding under the term loan A facility and for general corporate purposes. “The transaction is leverage neutral and improves the company's debt maturity profile,” Moody’s said in a press release.

The SGL-1 rating reflects the view Owens-Illinois will maintain very good liquidity over the next 12 to 18 months, generate free cash flow and maintain significant revolver availability.

The positive outlook reflects an expectation for steady improvement in Owens-Illinois' credit profile and higher predictability in operating free cash flow, Moody’s said.

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