USG announces launch of US$300M cash tender offer and consent solicitation for 9.75% senior notes due 2014

Audrey Dixon

CHICAGO , March 14, 2012 (press release) – USG Corporation (NYSE:USG) (“USG”), a leading building products company, today announced the commencement of a cash tender offer (the “Tender Offer”) for any and all of its outstanding 9.75% Senior Notes due 2014 (the “Notes”). USG also announced a concurrent solicitation of consents (the “Consent Solicitation”) to certain proposed amendments (the “Proposed Amendments”) to the terms of the Notes. The Tender Offer and Consent Solicitation are being made on the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement dated March 14, 2012 (the “Offer to Purchase”) and the related Letter of Transmittal and Consent (the “Letter of Transmittal”). Holders of Notes (“Holders”) that validly tender and do not validly withdraw their Notes pursuant to the Tender Offer in accordance with the procedures described in the Offer to Purchase will be deemed to have validly consented to the Proposed Amendments. There is no option to tender Notes without delivering the related consents, and there is no option to deliver consents without tendering Notes.

The Tender Offer will expire at 11:59 p.m., New York City time, on April 11, 2012, unless extended or earlier terminated as described in the Offer to Purchase (such time and date, as they may be extended, the “Expiration Time”). The consideration for each $1,000 principal amount of Notes validly tendered and accepted for purchase pursuant to the Tender Offer will be the Tender Offer Consideration (as set forth in the table below). Holders must validly tender and not validly withdraw their Notes at or prior to 5:00 p.m., New York City time, on March 27, 2012, unless extended or earlier terminated as described in the Offer to Purchase (such time and date, as they may be extended, the “Early Tender Time”), to be eligible to receive the Total Consideration (as set forth in the table below), which is the Tender Offer Consideration plus the early tender premium set forth in the table below (the “Early Tender Premium”). Holders of Notes that validly tender their Notes after the Early Tender Time, but at or prior to the Expiration Time, will receive the Tender Offer Consideration, but not the Early Tender Premium. In addition, accrued interest up to, but not including, the applicable settlement date of the Notes will be payable in cash on all validly tendered and accepted Notes. No separate consideration or fee is being paid in the Consent Solicitation. Validly tendered Notes may be validly withdrawn (thereby revoking the related consents) at any time at or prior to 5:00 p.m., New York City time, on March 27, 2012 (the “Withdrawal and Revocation Deadline”), but not thereafter.

The following table sets forth the material pricing terms of the Tender Offer and Consent Solicitation:
 

The Tender Offer and Consent Solicitation are subject to the satisfaction or waiver of a number of conditions as set forth in the Offer to Purchase, including the receipt by USG of proceeds from a proposed debt financing on terms reasonably satisfactory to USG, in its sole discretion, generating net proceeds in an amount that USG deems sufficient to effect the repurchase of the Notes validly tendered and accepted for purchase pursuant to the Tender Offer.

The Proposed Amendments would eliminate substantially all of the restrictive covenants applicable to the Notes (other than, among other covenants, the covenant to pay interest and premium, if any, on, and principal of, the Notes when due) and certain events of default and related provisions applicable to the Notes. If you tender your Notes pursuant to the Tender Offer, you are consenting to the Proposed Amendments with respect to such tendered Notes. Adoption of the Proposed Amendments requires the consent of the Holders of at least a majority of the principal amount of the outstanding Notes (excluding any Notes owned by USG or its affiliates). USG is seeking consents to all of the Proposed Amendments as a single proposal. The Tender Offer is not conditioned on the receipt of consents required for the adoption of the Proposed Amendments or on any minimum amount of the Notes being tendered. No separate consent payment or fee is being paid to Holders in the Consent Solicitation.

USG has retained Citigroup Global Markets, Inc. and J.P. Morgan Securities LLC to serve as dealer managers for the Tender Offer and solicitation agents for the Consent Solicitation. USG has appointed Global Bondholder Services Corporation (“GBS”) to serve as the depositary and information agent for the Tender Offer and Consent Solicitation.

For additional information regarding the terms of the Tender Offer and Consent Solicitation, please contact Citigroup Global Markets, Inc. at (800) 558-3745 (toll free) or (212) 723-6106 (collect), or J.P. Morgan Securities LLC at (800) 245-8125 (toll free) or (212) 270-0761 (collect). Requests for documents and questions regarding the Tender Offer and Consent Solicitation should be directed to GBS at (212) 430-3774 (banks and brokers) or (866) 795-2200 (all others).

None of USG, its board of directors, the dealer managers and solicitation agents, GBS or the trustee for the Notes, or any of their respective affiliates, is making any recommendation as to whether Holders should tender any Notes in response to the Tender Offer. Holders must make their own decision as to whether to tender any of their Notes (and thereby deliver the related consents to the Proposed Amendments) and, if so, the principal amount of Notes to tender.

This announcement is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell securities. The Tender Offer and Consent Solicitation are being made solely by means of the Offer to Purchase and the related Letter of Transmittal. In those jurisdictions where the securities, blue sky or other laws require any tender offer to be made by a licensed broker or dealer, the Tender Offer and Consent Solicitation will be deemed to be made on behalf of USG by the dealer managers and solicitation agents or one or more registered brokers or dealers licensed under the laws of such jurisdiction.

About USG

USG Corporation is a manufacturer and distributor of high-performance building systems through its United States Gypsum Company, USG Interiors, LLC, L&W Supply Corporation and other subsidiaries. Headquartered in Chicago, USG's worldwide operations serve the residential and non-residential construction markets, repair and remodel construction markets, and industrial processes. USG's wall, ceiling, flooring and roofing products provide leading-edge building solutions for customers, while L&W Supply center locations efficiently stock and deliver building materials nationwide.

Source: USG Corporation

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