USG gets approval to expand, extend letter-of-credit facility

By Caroline Salls

Pittsburgh, April 15 - USG Corp. received permission to increase the size of its letter-of-credit facility and extend the termination date, according to a filing Friday with the U.S. Bankruptcy Court for the District of Delaware.

The facility will be raised to $175 million from $100 million and the maturity extended to April 30, 2008 from April 30, 2006.

In a March 21 filing requesting the change, USG said the extra capacity is needed for general corporate purposes, including insurance, environmental and foreign trade purposes. In addition, USG wants to use the new facility to replace $36 million of letters of credit issued under its pre-bankruptcy facility that are nearing their expiry dates. Renewing the guarantees would require the consent of all lenders, which the company considers impractical, given the trading that has occurred.

The commitment fee on the facility will remain at 25 basis points and the letter-of-credit fee at 50 basis points. Security will remain cash or property equal to 103% of the amount of letters of credit outstanding. LaSalle Bank NA is the lender.

USG noted that it no longer has a regular debtor-in-possession facility because of its strong liquidity position. As of Dec. 31, 2004, it had $1.25 billion of cash and marketable securities, up from $300 million when it filed for Chapter 11.

USG filed for bankruptcy on June 25, 2001. Its Chapter 11 case number is 01-02094.

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