Owens-Illinois is in the market for a new credit facility to refinance debt set to expire April 1, 2007. The company has historically refinanced a year ahead of maturity, but also thought market conditions were right, Steve Bramlage, treasurer, said.
The company turned to historical leads, Deutsche Bank and Bank of America, to provide the new multi-currency facility. The financing consists of an $850 million multi-currency revolver that can be drawn in U.S. dollars, Australian dollars or euros; a $225 million, Australian dollar equivalent, "A" term loan; a $300 million "B" loan that can be drawn in U.S. dollars or the euro equivalent and a $125 million, Canadian dollar equivalent, term loan "C." Pricing is LIBOR plus 1 3/4% across all tranches (CIN, 5/8).
The decision to do the multi-currency facility was based on the geographic areas of acquisitions the company has made recently, Bramlage said. In 2005, the company doubled its European presence after it purchased BSN Glasspack. In 1998 it acquired BTR, which expanded its operations in Australia, New Zealand, China, Indonesia and other countries. He said the company has not announced any potential new acquisitions.
Moody's Investors Service assigned a B1 rating to the financing and Standard & Poor's assigned a BB- rating. Based in Toledo, Ohio, Owens-Illinois is the largest maker of glass containers in the world. Major customers include Anheuser-Bush and H.J. Heinz.