S&P: Owens-Illinois loan BBB

Standard & Poor's said it assigned a BBB senior secured debt rating and 1 recovery rating to Owens-Illinois Inc.'s proposed $2 billion five-year senior secured credit facility. The 1 recovery rating indicates the expectation for very high (90% to 100%) recovery.

S&P affirmed all the existing ratings, including the BB+ corporate credit rating, on Owens-Illinois and its subsidiaries.

The outlook is stable.

Owens-Illinois plans to use the proceeds of the new facility to refinance borrowings under its existing credit facility which matures in 2012 and $400 million of notes due in 2014.

The ratings on Owens-Illinois reflect its satisfactory business risk profile and significant financial risk profile, the agency said.

The ratings consider that shipments of glass containers declined during the recent recession, certain end markets have been slow to recover and Owens-Illinois is vulnerable to substitution with alternative materials and customer consolidation, the agency added.

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