Owens-Brockway Glass Container Inc. Announces Pricing of Senior Notes Offering
O-I Glass announced the pricing of a private offering by its subsidiary, Owens-Brockway Glass Container (OBGC), for $300 million in senior notes due 2032 at an interest rate of 7.375%. The net proceeds, approximately $297 million after commissions, will go towards redeeming OBGC's outstanding 6.375% senior notes due 2025. The offering will close on May 30, 2024, subject to customary conditions. The notes are unregistered under the U.S. Securities Act and offered to qualified institutional buyers and non-U.S. persons under specific regulations. This announcement is not an offer to sell or buy any securities.
- OBGC is raising $300 million through senior notes, enhancing liquidity.
- Proceeds will be used to redeem existing 6.375% notes due 2025, potentially reducing interest expenses.
- The offering is expected to close soon, indicating investor confidence.
- Offering proceeds after commissions are substantial at $297 million.
- The notes are guaranteed by Owens-Illinois Group and certain U.S. subsidiaries, adding security for investors.
- The offering's interest rate of 7.375% is relatively high, indicating higher cost of borrowing.
- The notes are not registered under the U.S. Securities Act, limiting their marketability.
- Potential investors are to qualified institutional buyers and certain non-U.S. persons, restricting the investor base.
- There are offering expenses not deducted from the net proceeds, reducing overall funds available.
Insights
The pricing of $300 million aggregate principal amount of 7.375% senior notes due 2032 by Owens-Brockway Glass Container Inc. (OBGC) is a noteworthy event. This move is particularly interesting due to the high interest rate of
However, the successful pricing of these notes indicates investor confidence in OBGC's ability to service its debt. The proceeds are earmarked for redeeming the 2025 notes, which can be seen as a debt restructuring strategy. By extending the maturity of its debt, OBGC is likely aiming to improve its short-term liquidity position, albeit at a higher interest cost.
The guarantee by Owens-Illinois Group, Inc. and certain subsidiaries enhances the security of the new notes, providing additional layers of assurance to investors. Overall, this move reflects a strategic decision to manage upcoming maturities and optimize the debt profile, though the higher cost of borrowing warrants attention in terms of long-term financial impact.
PERRYSBURG, Ohio, May 20, 2024 (GLOBE NEWSWIRE) -- FOR IMMEDIATE RELEASE
O-I Glass, Inc. (the “Company”) announced that Owens-Brockway Glass Container Inc. (“OBGC”), an indirect wholly owned subsidiary of the Company, priced a private offering (the “Offering”) of
OBGC expects to use the net proceeds from the Offering to redeem all of OBGC’s outstanding
The Notes and the guarantees have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws, and are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act and to certain non-U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act. Unless so registered, the Notes and the guarantees may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. Prospective purchasers that are qualified institutional buyers are hereby notified that the seller of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A.
The information contained in this news release is for informational purposes only and shall not constitute a notice of redemption for the 2025 OBGC Notes or an offer to sell or the solicitation of an offer to buy the 2025 OBGC Notes, the Notes or the guarantees, nor shall there be any sale of the Notes and the guarantees in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
About O-I Glass
At O-I Glass, Inc. (NYSE: OI), we love glass and we’re proud to be one of the leading producers of glass bottles and jars around the globe. Glass is not only beautiful, it’s also pure and completely recyclable, making it the most sustainable rigid packaging material. Headquartered in Perrysburg, Ohio (USA), O-I is the preferred partner for many of the world’s leading food and beverage brands. We innovate in line with customers’ needs to create iconic packaging that builds brands around the world. Led by our diverse team of more than 23,000 people across 68 plants in 19 countries, O-I achieved net sales of
Forward-Looking Statements
This press release contains “forward-looking” statements related to the Company within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 27A of the Securities Act. Forward-looking statements reflect the Company’s current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words “believe,” “expect,” “anticipate,” “will,” “could,” “would,” “should,” “may,” “plan,” “estimate,” “intend,” “predict,” “potential,” “continue,” and the negatives of these words and other similar expressions generally identify forward-looking statements.
It is possible that the Company’s future financial performance may differ from expectations due to a variety of factors including, but not limited to the following: (1) the general political, economic and competitive conditions in markets and countries where the Company has operations, including uncertainties related to economic and social conditions, trade disputes, disruptions in the supply chain, competitive pricing pressures, inflation or deflation, changes in tax rates and laws, war, civil disturbance or acts of terrorism, natural disasters, public health issues and weather, (2) cost and availability of raw materials, labor, energy and transportation (including impacts related to the current Ukraine-Russia and Israel-Hamas conflicts and disruptions in supply of raw materials caused by transportation delays), (3) competitive pressures from other glass container producers and alternative forms of packaging or consolidation among competitors and customers, (4) changes in consumer preferences or customer inventory management practices, (5) the continuing consolidation of the Company’s customer base, (6) the Company’s ability to improve its glass melting technology, known as the modular advanced glass manufacturing asset (“MAGMA”) program, and implement it within the timeframe expected, (7) unanticipated supply chain and operational disruptions, including higher capital spending, (8) seasonality of customer demand, (9) the failure of the Company’s joint venture partners to meet their obligations or commit additional capital to the joint venture, (10) labor shortages, labor cost increases or strikes, (11) the Company’s ability to acquire or divest businesses, acquire and expand plants, integrate operations of acquired businesses and achieve expected benefits from acquisitions, divestitures or expansions, (12) the Company’s ability to generate sufficient future cash flows to ensure the Company’s goodwill is not impaired, (13) any increases in the underfunded status of the Company’s pension plans, (14) any failure or disruption of the Company’s information technology, or those of third parties on which the Company relies, or any cybersecurity or data privacy incidents affecting the Company or its third-party service providers, (15) risks related to the Company’s indebtedness or changes in capital availability or cost, including interest rate fluctuations and the ability of the Company to generate cash to service indebtedness and refinance debt on favorable terms, (16) risks associated with operating in foreign countries, (17) foreign currency fluctuations relative to the U.S. dollar, (18) changes in tax laws or U.S. trade policies, (19) the Company’s ability to comply with various environmental legal requirements, (20) risks related to recycling and recycled content laws and regulations, (21) risks related to climate-change and air emissions, including related laws or regulations and increased environmental, social and governance scrutiny and changing expectations from stakeholders, (22) risks related to the Company’s long-term succession planning process and (23) the other risk factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and any subsequently filed Quarterly Reports on Form 10-Q or the Company’s other filings with the Securities and Exchange Commission.
It is not possible to foresee or identify all such factors. Any forward-looking statements in this press release are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments, and other factors it believes are appropriate in the circumstances. 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 or operations and financial condition, the Company does not assume any obligation to update or supplement any particular forward-looking statements contained in this press release.
SOURCE: O-I Glass, Inc.
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FAQ
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