Owens-Illinois Announces New Credit Facilities

Apr 26, 2001, 01:00 ET from Owens-Illinois, Inc.

    TOLEDO, Ohio, April 26 /PRNewswire/ -- Owens-Illinois, Inc., (NYSE:   OI)
 today announced that certain of its subsidiaries have entered into three-year
 senior secured credit facilities totaling $4.5 billion.  The new facilities,
 which have a maturity date of March 31, 2004, consist of a $3.0 billion
 revolving credit facility and a $1.5 billion term loan.  Proceeds from
 borrowings under the new facilities will be used to repay all amounts
 outstanding under, and terminate, the company's $4.5 billion revolving credit
 facility, which had been scheduled to mature on December 31, 2001.
     David G. Van Hooser, senior vice president and chief financial officer,
 said, "These new credit facilities should provide all of the bank financing
 needs for our existing businesses and the company for the next three years.
 We greatly appreciate the unanimous support of the banks in the company's
 existing facility in providing the commitments for these new facilities in an
 extremely challenging bank credit market.  The bank credit market is
 especially difficult for companies with an asbestos liability, even if that
 liability is manageable, as we continue to believe it is for Owens-Illinois."
 All lenders participating in the company's existing facility, consisting of 81
 banks, committed to the new facilities.  Deutsche Bank Alex. Brown Inc., Banc
 of America Securities LLC, and Scotia Capital Inc. arranged the financing.
     Borrowings under the new facilities are secured by substantially all the
 assets of the company's domestic subsidiaries and certain foreign
 subsidiaries.  Borrowings under the new facilities are also secured by a
 pledge of the intercompany debt and equity in most of the domestic
 subsidiaries and certain stock in certain foreign subsidiaries.  Borrowings
 under the company's existing $4.5 billion credit facility were unsecured.
     In connection with the bank financing, existing senior note and debenture
 holders have been offered a second lien on the intercompany debt and capital
 stock owned by the two principal subsidiaries that own the glass container and
 plastics packaging businesses.  The two principal subsidiaries also have
 offered to guarantee, on a subordinated basis, the existing senior notes and
 debentures.  The trustee for the six series of notes and debentures has
 indicated a willingness to sign supplemental indentures that would provide for
 such security and guarantees, upon receiving consents from holders
 representing a majority of the principal amount outstanding of each series.
 The company is arranging for the solicitation of these consents.
     All-in pricing on the new facilities is Libor (the London interbank
 offered rate) plus 250 basis points.  That is an increase of 1.375 percentage
 points from pricing for the existing facility, which was Libor plus 112.5
 basis points.  Covenants in the new facilities enable the subsidiaries and the
 company to continue to operate existing businesses on a day-to-day basis
 consistent with past practice.
     Despite the increase in spreads under the new facilities, recent
 reductions in underlying interest rates could result in favorable year-over-
 year interest expense comparisons for the company for the balance of 2001.
 Mr. Van Hooser said, "Recent rate reductions by the Federal Reserve have more
 than offset the 200-basis-point overall increase resulting from the combined
 effect of the increased spreads and other costs, including the amortization of
 fees and expenses associated with the financing.  For the last eight months of
 2000, one-month U.S. dollar Libor averaged 6.62%.  Today, the one-month U.S.
 dollar Libor rate is at 4.46%, representing a reduction of 216 basis points if
 rates were to remain at current levels for the balance of the year." In
 addition, debt levels of the company are currently below prior year levels.
 The company's net interest expense for 2000, including the amortization of
 deferred finance fees, was $454.2 million.
     Proceeds from the previously announced sale of the Harbor Capital Advisors
 businesses will be used to reduce the term loan.  That sale is expected to
 close in June.  Cash proceeds are currently estimated to be approximately
 $450 million after expected adjustments and holdbacks.  The subsidiaries hope
 to further reduce outstanding borrowings under the term loan over the next
 several years by issuing public debt.  The subsidiaries also have flexibility
 under the new bank facilities to issue additional public debt to refinance the
 senior notes maturing in 2004 and 2005.
 
     Forward looking Statements
     This news release may contain "forward looking" statements as defined in
 the Private Securities Litigation Reform Act of 1995.  Forward looking
 statements reflect the Company's best assessment at the time, and thus involve
 uncertainty and risk.  It is possible the Company's future financial
 performance may differ from expectations due to a variety of factors such as
 those described in the Company's December 31, 2000 Form 10-K filed with the
 Securities and Exchange Commission.  Forward looking statements are not a
 guarantee of future performance, and actual results or developments may differ
 materially from expectations. While the Company continually reviews trends and
 uncertainties affecting the Company's results of operations and financial
 condition, the Company does not intend to update any particular forward
 looking statements contained in this news release.
 
     Company Profile
     Owens-Illinois is the largest manufacturer of glass containers in North
 America, South America, Australia, New Zealand, and China, and one of the
 largest in Europe.  O-I also is a worldwide manufacturer of plastics
 packaging, with operations in North America, South America, Australia, Europe,
 and Asia.  Plastics packaging products manufactured by O-I include containers,
 closures, and prescription containers.
 
     Copies of Owens-Illinois news releases are available at the Owens-Illinois
 web  site at www.o-i.com or at www.prnewswire.com . To contact Owens-Illinois
 investor relations, dial 419-247-2400.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X56986929
 
 

SOURCE Owens-Illinois, Inc.
    TOLEDO, Ohio, April 26 /PRNewswire/ -- Owens-Illinois, Inc., (NYSE:   OI)
 today announced that certain of its subsidiaries have entered into three-year
 senior secured credit facilities totaling $4.5 billion.  The new facilities,
 which have a maturity date of March 31, 2004, consist of a $3.0 billion
 revolving credit facility and a $1.5 billion term loan.  Proceeds from
 borrowings under the new facilities will be used to repay all amounts
 outstanding under, and terminate, the company's $4.5 billion revolving credit
 facility, which had been scheduled to mature on December 31, 2001.
     David G. Van Hooser, senior vice president and chief financial officer,
 said, "These new credit facilities should provide all of the bank financing
 needs for our existing businesses and the company for the next three years.
 We greatly appreciate the unanimous support of the banks in the company's
 existing facility in providing the commitments for these new facilities in an
 extremely challenging bank credit market.  The bank credit market is
 especially difficult for companies with an asbestos liability, even if that
 liability is manageable, as we continue to believe it is for Owens-Illinois."
 All lenders participating in the company's existing facility, consisting of 81
 banks, committed to the new facilities.  Deutsche Bank Alex. Brown Inc., Banc
 of America Securities LLC, and Scotia Capital Inc. arranged the financing.
     Borrowings under the new facilities are secured by substantially all the
 assets of the company's domestic subsidiaries and certain foreign
 subsidiaries.  Borrowings under the new facilities are also secured by a
 pledge of the intercompany debt and equity in most of the domestic
 subsidiaries and certain stock in certain foreign subsidiaries.  Borrowings
 under the company's existing $4.5 billion credit facility were unsecured.
     In connection with the bank financing, existing senior note and debenture
 holders have been offered a second lien on the intercompany debt and capital
 stock owned by the two principal subsidiaries that own the glass container and
 plastics packaging businesses.  The two principal subsidiaries also have
 offered to guarantee, on a subordinated basis, the existing senior notes and
 debentures.  The trustee for the six series of notes and debentures has
 indicated a willingness to sign supplemental indentures that would provide for
 such security and guarantees, upon receiving consents from holders
 representing a majority of the principal amount outstanding of each series.
 The company is arranging for the solicitation of these consents.
     All-in pricing on the new facilities is Libor (the London interbank
 offered rate) plus 250 basis points.  That is an increase of 1.375 percentage
 points from pricing for the existing facility, which was Libor plus 112.5
 basis points.  Covenants in the new facilities enable the subsidiaries and the
 company to continue to operate existing businesses on a day-to-day basis
 consistent with past practice.
     Despite the increase in spreads under the new facilities, recent
 reductions in underlying interest rates could result in favorable year-over-
 year interest expense comparisons for the company for the balance of 2001.
 Mr. Van Hooser said, "Recent rate reductions by the Federal Reserve have more
 than offset the 200-basis-point overall increase resulting from the combined
 effect of the increased spreads and other costs, including the amortization of
 fees and expenses associated with the financing.  For the last eight months of
 2000, one-month U.S. dollar Libor averaged 6.62%.  Today, the one-month U.S.
 dollar Libor rate is at 4.46%, representing a reduction of 216 basis points if
 rates were to remain at current levels for the balance of the year." In
 addition, debt levels of the company are currently below prior year levels.
 The company's net interest expense for 2000, including the amortization of
 deferred finance fees, was $454.2 million.
     Proceeds from the previously announced sale of the Harbor Capital Advisors
 businesses will be used to reduce the term loan.  That sale is expected to
 close in June.  Cash proceeds are currently estimated to be approximately
 $450 million after expected adjustments and holdbacks.  The subsidiaries hope
 to further reduce outstanding borrowings under the term loan over the next
 several years by issuing public debt.  The subsidiaries also have flexibility
 under the new bank facilities to issue additional public debt to refinance the
 senior notes maturing in 2004 and 2005.
 
     Forward looking Statements
     This news release may contain "forward looking" statements as defined in
 the Private Securities Litigation Reform Act of 1995.  Forward looking
 statements reflect the Company's best assessment at the time, and thus involve
 uncertainty and risk.  It is possible the Company's future financial
 performance may differ from expectations due to a variety of factors such as
 those described in the Company's December 31, 2000 Form 10-K filed with the
 Securities and Exchange Commission.  Forward looking statements are not a
 guarantee of future performance, and actual results or developments may differ
 materially from expectations. While the Company continually reviews trends and
 uncertainties affecting the Company's results of operations and financial
 condition, the Company does not intend to update any particular forward
 looking statements contained in this news release.
 
     Company Profile
     Owens-Illinois is the largest manufacturer of glass containers in North
 America, South America, Australia, New Zealand, and China, and one of the
 largest in Europe.  O-I also is a worldwide manufacturer of plastics
 packaging, with operations in North America, South America, Australia, Europe,
 and Asia.  Plastics packaging products manufactured by O-I include containers,
 closures, and prescription containers.
 
     Copies of Owens-Illinois news releases are available at the Owens-Illinois
 web  site at www.o-i.com or at www.prnewswire.com . To contact Owens-Illinois
 investor relations, dial 419-247-2400.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X56986929
 
 SOURCE  Owens-Illinois, Inc.