USG completes rights offering, $2.8 billion credit facility takes effect

By Caroline Salls

Pittsburgh, Aug. 2 - USG Corp. said 37.95 million rights were exercised under its recently concluded rights offering, and Berkshire Hathaway Inc. acquired 6.97 million shares in connection with its role as backstop purchaser for the rights offering, according to a company news release.

The company also reported that its $2.8 billion credit facility is now in effect.

The credit facility, which is rated Baa3 by Moody's Investors Service and BB+ by Standard & Poor's, consists of a $650 million revolving credit facility, a $1 billion term loan facility and a $1.15 billion tax bridge term loan facility.

The Berkshire Hathaway shares include 6.5 million shares underlying rights distributed to it in connection with the shares it owned on the record date for the rights offering and 0.47 million shares underlying rights distributed to other stockholders that were not exercised in the rights offering.

As a result, Berkshire Hathaway now owns 13.47 million shares or 15% of the company's outstanding common stock.

"We are gratified to see the very high level of participation in the rights offering," USG chairman and chief executive officer William C. Foote said in the release.

The company used a portion of the $1.8 billion gross proceeds from the rights offering and the Berkshire Hathaway backstop commitment to repay pre-bankruptcy bank debt and senior notes under USG's plan of reorganization.

Remaining proceeds, together with other available funds, will be used as required to make the balance of the payments contemplated under the plan and for general corporate purposes.

"The successful completion of the rights offering and the closing of the credit agreement put the company in a sound financial position," Foote said in the release.

"We are able to meet the financial obligations of the plan while still continuing to implement our strategy to expand our distribution business, invest in our market-leading wallboard manufacturing operations and develop new building solutions for our customers."

USG, a Chicago-based building materials company, emerged from bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on June 20. Its Chapter 11 case number was 01-02094.

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