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Owens Corning begins $400 million tender offers for 9%, 6.5% notes
By Susanna Moon
Chicago, Nov. 4 – Owens Corning began a maximum tender offer for its $250 million 9% senior notes due 2019 and its $400 million 6.5% senior notes due 2016, according to an 8-K filing with the Securities and Exchange Commission.
The company said on Nov. 4 that it would spend up to $300 million, including the premium but excluding accrued interest, on the tender offers and then lifted the cap to $400 million later the same day.
The tender offer for the 9% notes has a sub-cap of $130 million, according to the earlier press release.
Pricing will be set at 2 p.m. ET on Nov. 18 using a fixed spread over the bid-side yield of the reference security as follows:
• The 9% notes will be priced using 1.5% Treasury notes due Oct. 31, 2019 plus 190 basis points; and
• The 6.5% notes will be based on the 0.375% Treasury notes due Oct. 31, 2016 plus 30 bps.
The hypothetical total purchase price for each $1,000 principal amount are $1,228.53 for the 9% notes and $1,114.28 for the 6.5% notes.
The total purchase prices include an early tender premium of $50.00 per $1,000 of notes tendered by 5 p.m. ET on Nov. 18, the early tender date.
The company also will pay accrued interest to but excluding the settlement date.
The tender offers will end at midnight ET on Dec. 3. Tendered notes may be withdrawn until the early tender deadline.
The offers are conditioned on the company obtaining financing. Owens Corning priced an upsized $400 million issue of 4.2% 10-year senior notes at Treasuries plus 210 bps on Nov. 4, as reported by Prospect News.
Goldman Sachs & Co. (800 828-3182 or 212 357-1452 collect), J.P. Morgan Securities LLC (866 834-4666 or 212 834-4811 collect) and Wells Fargo Securities, LLC (866 309-6316 or 704 410-4760 collect) are the dealer managers. The tender and information agent is D.F. King & Co., Inc. (866 416-0552 or 212 269-5550 banks and brokers).
The glass fiber technology company and maker of composite and building materials is based in Toledo, Ohio.
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