Standard & Poor's Ratings Services has assigned its 'BB-' rating & its recovery rating of '2' to the proposed Owens-Illinois US$ 1.5BN senior secured credit facilities, based on preliminary terms & conditions. The rating on the proposed credit facilities is the same as the corporate credit rating; in the event of a payment default lenders can expect substantial (80-100%) recovery of principal. Proceeds from the new credit facilities will be used to repay the outstanding amount under the existing credit facilities. At the same time, Standard & Poor's assigned its recovery rating of '2' to the existing US$2.08BN senior secured notes of Owens-Brockway Glass Container, a wholly-owned subsidiary of Owens Illinois. The senior secured notes are rated 'BB-'. The corporate credit rating on Owens-Illinois is 'BB-'. The rating outlook is negative. Ohio-based Owens-Illinois' total debt was US$ 5.3BN as of 31/12/05. "The ratings on Owens-Illinois & related entities reflect its highly leveraged financial profile, subpar credit measures, & meaningful concerns regarding its asbestos liability. These factors are partially offset by a satisfactory business position & attractive profitability", said Standard & Poor's credit analyst Liley Mehta.
