Owens-Brockway to tender for Owens-Illinois 7.85% '04 notes

Owens-Brockway Glass Container Inc. said on Friday (April 25) that it intends to offer to purchase for cash all $300 million of outstanding 7.85% senior notes due 2004 issued by its corporate parent, Owens-Illinois, Inc., and will also solicit noteholder consents for proposed indenture amendments that would eliminate certain covenants and events of default.

The company did not initially set an expiration deadline for the tender offer, nor did it outline a time frame within which the offer would take place.

It said that the purchase price for the notes is expected to be $1,045 per $1,000 principal amount of notes tendered, and will be payable to note holders who both tender their notes and deliver consents to the proposed indenture amendments. In addition, tendering holders will be paid accrued and unpaid interest up to, but not including, the date of payment for the notes.

Owens-Brockway said the offer will be conditioned upon its receipt of sufficient net proceeds from its previously announced proposed offering of ten-year senior notes so as to allow Owens-Brockway to pay the aggregate consideration to be paid in the tender offer.

Deutsche Bank Securities Inc. will act as the exclusive dealer manager and solicitation agent in connection with the tender offer and consent solicitation.

AS PREVIOUSLY ANNOUNCED: Owens-Brockway, a Toledo, Ohio-based indirect wholly-owned subsidiary of Owens-Illinois Inc., said on April 21 that it would sell a total of $800 million of new notes in a Rule 144A private offering.

The company said that it would use a portion of the proceeds of the note sale to repurchase its corporate parent's $300 million aggregate principal amount of 7.85% notes.

A portion of the proceeds would also be used to permanently reduce the revolving loan portion of the company's secured credit agreement, which matures on March 31, 2004.

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