Owens-Illinois' bank debt traded up a few points this week, with the term loan trading at 94-95 and the revolver trading in the 91 range. "The company has had good numbers and is a strong company," a dealer said, explaining the positives for Owens-Illinois. However, the company's asbestos related issues continues to haunt the name. In its third-quarter report, the company noted that improving energy costs, reduced interest expense, and lower fixed costs are continuing to have a favorable impact on the company's performance. Owens Illinois is a glass manufacturer based in Toledo, Ohio. Calls to R. Scott Trumbull, cfo, were referred to the investor relations department and not returned by press time.
In June Moody's Investors Service assigned a B1 rating to the $4.5 billion revolver, noting the collateral coverage. Christophe Razaire, senior credit officer, said at the time this would put the revolver one notch above the term loan, which had been downgraded based on the likelihood that free cash flow available for debt repayment would remain thin over the near term. 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.