O-I Glass ups green notes offering, launches $700 million 7¼% notes, €600 million 6¼% notes

By Paul A. Harris

Portland, Ore., May 12 – O-I Glass, Inc. launched two upsized tranches of senior green notes via two of its indirect, wholly owned subsidiaries on Friday, according to market sources.

Owens-Brockway Glass Container Inc. (OBGC) launched an upsized $700 million tranche of eight-year notes (B2/B+) at 7¼%. The tranche, which increased in size from $500 million, launched at the tight end of price talk in the 7 3/8% area. Initial guidance was in the mid-to-high 7% area.

Book size was heard to be $2.2 billion heading into mid-morning on Friday, a trader said.

Wells Fargo Securities LLC is the left lead for the OBGC notes.

OI European Group BV (OIEG) launched an upsized €600 million tranche of five-year notes (Ba3/BB-) at 6¼%. The tranche, which increased in size from €500 million, was in the market with early guidance in the mid-to-high 6% area.

JPMorgan is the left lead for the OIEG notes.

Books were set to close early Friday morning, New York time, and the deal is expected to price later in the Friday session.

The eight-year notes come with three years of call protection, while the five-year notes come with two years of call protection. Initial call premiums are set at par plus 50% of the respective coupons.

The OIEG notes come with guarantees which render them superior in credit quality to the OBGC dollar notes.

Managing both tranches of the Rule 144A and Regulation S for life offering are global coordinators and joint bookrunners Wells Fargo, JPMorgan and Credit Agricole.

BNP Paribas, BofA, Deutsche Bank, Goldman Sachs, Mizuho, Rabobank and Scotiabank are also joint bookrunners for both tranches.

Proceeds from both tranches plus cash on hand will be used to fund tender offers for $250 million of outstanding OBGC 5 7/8% senior notes due 2023 and €725 million of OIEG 3 1/8% senior notes due 2024. The incremental proceeds resulting from the $200 million and €100 million tranche size increases will be used to refinance dollar-denominated notes maturing in 2025.

O-I Glass intends to allocate an amount equal to the net proceeds to finance and/or refinance new and/or existing eligible green projects as defined in its Green Financing Framework.

Credit Agricole is the lead green structuring agent.

O-I Glass, formerly Owens-Illinois, Inc., is a container glass manufacturer based in Perrysburg, Ohio.

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