Owens Corning prices $400 million tender offers for 9%, 6.5% notes

By Toni Weeks

San Luis Obispo, Calif., Nov. 18 – Owens Corning announced the pricing in its tender offers for up to an aggregate $400 million principal amount of its $250 million of 9% senior notes due 2019 and its $400 million of 6.5% senior notes due 2016, according to a press release.

For each principal amount of notes tendered by 5 p.m. ET on Nov. 18, the early tender time, the company will pay $1,229.81 for its 9% notes and $1,114.56 for its 6.5% notes. The total purchase prices include an early tender premium of $50.00 per $1,000 principal amount of notes. Holders who tender after the early tender time but before the expiration time, midnight ET on Dec. 3, will not receive the early tender premium.

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 an earlier press release.

Pricing was 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 were priced using 1.5% Treasury notes due Oct. 31, 2019 plus 190 basis points; and

• The 6.5% notes were based on the 0.375% Treasury notes due Oct. 31, 2016 plus 30 bps.

The company also will pay accrued interest to but excluding the settlement date. If the company proceeds with the settlement of the notes tendered by the early tender time, that date is expected to be Nov. 19.

Tendered notes may no longer be withdrawn.

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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