Owens Corning sets pricing in $350 million tender offer for notes

New York, Nov. 1 - Owens Corning announced pricing in its tender offers for up to $250 million principal amount of its $650 million of 6½% senior notes due 2016 and up to $100 million principal amount of its $350 million 9% senior notes due 2019.

The company will pay $1,179.38 per $1,000 principal amount for the 6½% notes and $1,321.22 per $1,000 principal amount for the 9% notes. Both figures include a possible early tender premium of $30 per $1,000.

Owens Corning said the offer was fully subscribed by the early tender date. As a result, no further tenders will be accepted.

At its previous announcement on Oct. 29, Owens Corning extended all of the dates related to the offer due to market interruptions from Hurricane Sandy.

According to a press release, the price determination date was extended to 2 p.m. ET on Nov. 1 from 2 p.m. ET on Oct. 30.

The revised early tender date was moved to 5 p.m. ET on Nov. 1 from 5 p.m. ET on Oct. 30, with the expected early settlement date scheduled for Nov. 2 rather than Oct. 31. As before, tendered notes may be withdrawn by the early deadline.

Additionally, the tender offer will now expire at midnight ET on Nov. 16, and settlement for notes tendered after the early tender date will occur Nov. 19. Previously the offer was to expire at midnight on Nov. 14, with settlement occurring the following date.

The company reported that as of close of business on Oct. 19, $227,321,000 of the 6½% notes and $106,679,000 of the 9% notes have been tendered.

The company made previous changes to the terms of the offers on Oct. 29 when it increased pricing by revising the fixed spread that will be added to the bid-side yield of a reference Treasury note to determine pricing. Pricing for each $1,000 principal amount 6½% notes will be based on the 0.625% Treasury notes due Sept. 30, 2017 plus 120 basis points, changed from 190 bps, for a hypothetical total purchase price of $1,176.10, up from $1,150.47.

Likewise, pricing for the 9% notes will be based on the 1.625% Treasury notes due Aug. 15, 2022 plus 180 bps, down from 245 bps, for a hypothetical total purchase price of $1,313.10, up from $1,276.90.

As before, the total purchase price will include a $30.00 premium for each $1,000 principal amount of notes tendered by the early tender date. Those who tender after the early deadline will not receive the consent premium.

Holders will also receive accrued interest to the applicable settlement date.

The offer began on Oct. 17.

Completion of the tender offers is conditioned on completion of the company's senior notes offering. Proceeds from the notes sale also will be used to pay down revolver debt and for general corporate purposes.

Owens Corning priced $600 million of 4.2% 10-year senior notes on Oct. 17 to yield 240 bps over Treasuries.

Bank of America Merrill Lynch (888 292-0070 or collect 646 855-3401) and Wells Fargo Securities, LLC (866 309-6316 or collect 704 715-8341) are the dealer managers for the tender offers. D.F. King & Co., Inc. (800 290-6426 or banks and brokers 212 269-5550) is the tender and information agent.

Owens Corning is a Toledo, Ohio, building materials company.

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