Owens Corning wraps oversubscribed tender offers for 9%, 6.5% notes

By Susanna Moon

Chicago, Nov. 19 – Owens Corning said investors had tendered $126,707,000 of its 9% senior notes due 2019 and $257,342,000 of its 6.5% senior notes due 2016 by 5 p.m. ET on Nov. 18, the early tender date.

The company accepted for purchase $105,707,000 of the $250 million outstanding 9% notes using a proration factor of 83.521% and $242,248,000 of the $400 million outstanding 6.5% notes using a proration factor of 94.266%, according to a press release.

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, as noted before.

The offer is set to end at midnight ET on Dec. 3 but, because the offer has been oversubscribed, the company will accept no more notes tendered in the offer.

As previously announced, the total purchase price for each $1,000 principal amount will be $1,229.81 for the 9% notes and $1,114.56 for the 6.5% notes tendered by the early tender deadline.

The total payment includes an early tender premium of $50.00 per $1,000 principal amount of notes.

Holders who tender after the early tender date will receive the total amount less the early premium.

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, which was expected to be Nov. 19 for early tendered notes.

Tendered notes may no longer be withdrawn.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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