USG floats price talk on $1 billion term loan

By Sara Rosenberg

New York, May 25 - USG Corp. came out with opening price talk of Libor plus 75 basis points on the $1 billion five-year term loan tranche that is part of its proposed $2.8 billion exit financing credit facility, according to a market source.

The deal is scheduled to launch with a bank meeting on June 2.

JPMorgan and Goldman Sachs are the lead banks on the exit financing facility.

In addition to the term loan, the facility contains a $650 million five-year revolver and a $1.15 billion 21/2-year tax bridge term loan.

The draw period expiration date for the term loan is Jan. 31, 2007 and can be extended six months, depending on the passage of asbestos litigation.

Revolver proceeds will be used to repay the company's debtor-in-possession facility, to pay unsecured and administrative claims and for working capital and general corporate purposes.

Term loan proceeds will be used to fund payments on a contingent note payable to the company's asbestos personal injury trust.

And, tax bridge loan proceeds will be used for prepayments of the asbestos personal injury contingent note.

A hearing on approval of the commitment and fee letter is scheduled for June 19.

USG is a Chicago-based building materials company.

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