Owens-Illinois' bank debt traded up to the 98 1/4-99 range from 97 last week on the lingering rumor of a bond deal. Volume on trades could not be ascertained by press time, but dealers indicate it's small. The debt has moved up from 93 over the month as Owens-Illinois is rumored to be among the companies issuing notes to pay down bank debt. There has been no official company announcement, but the debt continues to get boosted on the rumor. "People are willing to trade on that alone," said a dealer. The Toledo, Ohio-based company is a glass manufacturer. Calls to R. Scott Trumbull, cfo, and the investor relations department were not returned by press time.
"It's a pretty large deal. People are looking for paper, and that's driving it up too," said a dealer, noting the demand is for the term loan and not the revolver, which he said is around 93. In early November the company released positive earnings numbers, citing improved energy costs, reduced interest expense and lower fixed costs. Deutsche Bank, Bank of America, and Mizuho lead the $7 billion deal, which is split into a $4.5 billion revolver and a $2.5 billion term loan. It expires in 2004. Pricing is linked to the company's leverage ratio.