Owens-Illinois to Offer Senior Notes - Analyst Blog
March 20 2013 - 9:00AM
Zacks
OI European Group B.V., an indirectly owned ancillary of
Owens-Illinois Group, Inc. (OI) announced its
intention to offer $388 million worth of Senior Notes scheduled to
mature in 2021 depending on market conditions.
The proceeds from the issuance of Senior Notes will be deployed to
repurchase its outstanding $388 million of 6.875% Senior Notes due
2017.
Owens-Illinois exited 2012 with a long-term debt of $3,454 million,
down 4.7% year over year. Owens-Illinois’ debt-to-capital ratio
stood at 43.8% as of Dec 31, 2012, a decrease of 100 basis points
from Dec 31, 2011. This is in line with the company’s
commitment to debt reduction and strengthening its liquidity
position. Cash and cash equivalents were $431 million as of Dec 31,
2012, which increased 7.75% year over year.
Owens-Illinois remained disciplined in its capital allocation, as
evidenced by its cash debt repayments and the repurchase
activities. Net interest expense was also lower than the prior
year, primarily due to refinancing of higher cost debt and
non-recurrence of note repurchase premiums.
Owens-Illinois reported fourth-quarter 2012 adjusted earnings per
share of 40 cents, down 17% from the year-ago adjusted earnings of
48 cents per share, but up 8% from the Zacks Consensus Estimate of
37 cents. Weak economic conditions in Europe mainly hurt the
quarterly results.
Owens expects an overall modest volume growth in 2013 along with
higher prices that keep pace with higher material costs. Its global
cost reduction initiatives and European asset optimization program
are expected to benefit free cash flow and earnings.
Emerging regions and stable market conditions in North America will
help in the growth of Owens-Illinois. However, macroeconomic
uncertainty in Europe will remain a deterring factor.
Perrysburg, Ohio based Owens-Illinois Inc. is the largest
manufacturer of glass containers and has an esteemed clientele in
the liquor and the non-alcoholic beverage categories. Owens’ peers
in the same industry are Apogee Enterprises, Inc.
(APOG), Silgan Holdings Inc. (SLGN) and
Crown Holdings Inc. (CCK).
Owens currently retains a short-term Zacks Rank #3 (Hold).
APOGEE ENTRPRS (APOG): Free Stock Analysis Report
CROWN HLDGS INC (CCK): Free Stock Analysis Report
OWENS-ILLINOIS (OI): Free Stock Analysis Report
SILGAN HOLDINGS (SLGN): Free Stock Analysis Report
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