Owens Corning gives early tally in tenders for 9% notes, 7% notes

By Susanna Moon

Chicago, July 6 – Owens Corning said investors had tendered $82,198,000 of its $144,294,000 of 9% senior notes due 2019 and $335,408,000 of its $550 million of 7% senior notes due 2036 as of 5 p.m. ET on July 5, the early tender date.

Owens Corning accepted for purchase all of the 9% notes and $139,748,000, or about 42%, of the 7% notes, according to a company update on Thursday.

As announced June 21 the issuer is tendering for all of its 9% notes and up to $140 million of its 7% notes due 2036 until midnight ET on July 19.

Because the tender for the 2036 notes has been fully subscribed as of the early deadline, no more of those notes will be accepted for purchase, the company noted.

Pricing was scheduled for 2 p.m. ET on July 6 using the bid-side yield of a reference security plus a fixed spread for a hypothetical purchase price per $1,000 principal amount as follows:

• For the 9% notes, the 0.875% U.S. Treasury note due June 15, 2019 plus 50 basis points for a total hypothetical purchase price of $1,135.17; and

• For the 7% notes, the 3% U.S. Treasury note due Feb. 15, 2047 plus 150 bps for a total hypothetical purchase price of $1,361.32.

The total purchase price includes an early tender premium of $30.00 per $1,000 principal amount of notes tendered by the early tender deadline.

The hypothetical pricing was set using the yield of the reference Treasury security as of 2 p.m. ET on June 20 and an expected early settlement date of July 7.

The company will also pay accrued interest up to but excluding the settlement date of July 7 for early tenders and July 21 for any remaining tenders.

The offers contain a financing condition.

As reported, the company priced $600 million of 4.3% 30-year senior notes with a spread of 162.5 basis points over Treasuries on June 21.

Owens plans to redeem any 2019 notes that remain outstanding after the offer.

BofA Merrill Lynch (888 292-0072 or 980 387-3907) and Wells Fargo Securities, LLC (866 309-6316 or 704 410-4760) are the dealer managers. The tender and information agent is D.F. King & Co., Inc. (877 297-1747 or 212 269-5550)

Owens Corning is a Toledo, Ohio-based maker of composite building materials.

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