Owens Corning tallies early tenders for 9% and 7% notes, sets pricing

By Marisa Wong

Morgantown, W.Va., July 6 – Owens Corning announced pricing under its cash tender offers for any and all of its $144,294,000 9% senior notes due 2019 and up to $140 million of its $550 million 7% senior notes due 2036.

Pricing was set using the bid-side yield of a reference security plus a fixed spread for a total purchase price per $1,000 principal amount as follows:

• $1,134.45 for the 9% notes, based on the 0.875% U.S. Treasury note due June 15, 2019 plus 50 basis points; and

• $1,336.38 for the 7% notes, based on the 3% U.S. Treasury note due Feb. 15, 2047 plus 150 bps.

The total purchase price includes an early tender premium of $30.00 per $1,000 principal amount of notes tendered by 5 p.m. ET on July 5, the early tender deadline.

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 total consideration was calculated at 2 p.m. ET on July 6.

In an earlier announcement on Thursday, Owens Corning said investors had tendered $82,198,000 of its 9% notes due 2019 and $335,408,000 of its 7% notes due 2036 as of the early tender date.

The company accepted for purchase all of the tendered 9% notes and $139,748,000, or about 42%, of the tendered 7% notes, according to the earlier company update.

The offer expires at midnight ET on July 19.

Because the tender for the 7% notes has been fully subscribed as of the early deadline, no more of those notes will be accepted for purchase, the company noted.

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 bps over Treasuries on June 21.

Owens said it 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)

The offer began on June 21.

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

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