Owens Corning has released an offer to sell a new series of its unsecured senior notes. The net proceeds will be used to purchase up to USD 250 million aggregate principal amount of its 6.500% Senior Notes, and up to USD 100 million aggregate principal amount of its 9.000% Senior Notes, as well as to repay outstanding borrowings under its current revolving credit facility and for general corporate purposes.
Owens Corning is offering to sell, subject to market and other conditions, a new series of its unsecured senior notes in an underwritten public offering under its effective shelf registration statement (the “Senior Notes Offering”). Owens Corning intends to use the net proceeds of the Senior Notes Offering (i) first, to purchase up to USD 250 million aggregate principal amount of its 6.500% Senior Notes, due 2016, and up to USD 100 million aggregate principal amount of its 9.000% Senior Notes, due 2019 (collectively, the “Outstanding Notes”) in cash tender offers it commenced on 17 October (the “Tender Offers”), (ii) second, to repay outstanding borrowings under its current revolving credit facility and (iii) last, for general corporate purposes.
The Tender Offers are described in the Offers to Purchase For Cash, dated 17 October 2012 (the “Offer to Purchase”), which sets forth a complete description of the terms and conditions of the Tender Offers, and the related Letter of Transmittal (the “Letter of Transmittal”). Holders of Outstanding Notes are urged to read the Offer to Purchase and Letter of Transmittal carefully before making any decision with respect to the Tender Offers.
If Owens Corning purchases the entire USD 350 million aggregate principal amount of the Outstanding Notes in the Tender Offers, it anticipates that it will incur a “loss from debt extinguishment” resulting in a charge of approximately USD 65 million in the fourth quarter of 2012.
Holders who properly tender and do not withdraw their Outstanding Notes on or prior to 5 p.m., New York City time, on 30 October 2012, unless extended or earlier terminated (the “Early Tender Date”), will be eligible to receive the applicable Total Tender Offer Consideration (as defined in the Offer to Purchase), which includes the applicable Early Tender Premium as set forth in the table above. The applicable Total Consideration for each USD 1,000 principal amount of Outstanding Notes validly tendered and accepted for purchase will be determined in the manner described in the Offer to Purchase by reference to the applicable fixed spread over the bid-side yield of the applicable reference security, calculated as of 2 p.m., New York City time, on 30 October 2012. Holders of Outstanding Notes who validly tender and do not withdraw their Outstanding Notes after the Early Tender Date and at or before the Expiration Date will be eligible to receive only the applicable Late Tender Offer Consideration, which is equal to the applicable Total Tender Offer Consideration minus the applicable Early Tender Premium.
The amount of each series of Outstanding Notes purchased in the Tender Offers will be determined in accordance with the applicable Series Cap set forth in the table above, and as described in the Offer to Purchase and related Letter of Transmittal.
Holders may withdraw their tenders at any time before 5 p.m., New York City time on 30 October 2012, unless extended.
For Outstanding Notes tendered on or prior to the Early Tender Date, not subsequently validly withdrawn and accepted for payment, Owens Corning has the option for settlement to occur on the Early Settlement Date (as defined in the Offer to Purchase), which is expected to be the first business day following the Early Tender Date. Settlement for Outstanding Notes tendered after the Early Tender Date, but at or prior to the Expiration Date, is expected to occur on the first business day following the Expiration Date, unless extended.
In addition, all Outstanding Notes accepted for payment will be entitled to receipt of accrued and unpaid interest in respect of such Outstanding Notes from the last interest payment date to, but excluding, the applicable settlement date.
Consummation of the Tender Offers, and payment for the tendered Outstanding Notes, is subject to the satisfaction or waiver of certain conditions described in the Offer to Purchase, including the condition that Owens Corning has completed the Senior Notes Offering, as well as other customary conditions. Subject to applicable law, Owens Corning has reserved the absolute right, in its sole discretion, to at any time (i) waive any and all conditions to either or both of the Tender Offers, (ii) extend, terminate or withdraw either or both of the Tender Offers or (iii) otherwise amend either or both of the Tender Offers in any respect.
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC are acting as dealer managers for the Tender Offers. The tender and information agent for the Tender Offers is D.F. King & Co., Inc.
Requests for documentation for the Tender Offers should be directed to D.F. King & Co., Inc. at (800) 290-6426 (U.S. toll-free) or (212) 269-5550 (banks and brokers). Questions regarding the Tender Offers should be directed to Merrill Lynch, Pierce, Fenner & Smith Incorporated at (888) 292-0070 (U.S. toll-free) or (646) 855-3401 (collect) and Wells Fargo Securities, LLC at (866) 309-6316 (U.S. toll-free) or (704) 715-8341 (collect).
Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Wells Fargo Securities, LLC are acting as joint book-running managers for the Senior Notes Offering.
A registration statement relating to the senior notes being offered has been filed with the Securities and Exchange Commission and has become effective. The Senior Notes Offering may be made only by means of a prospectus supplement and the accompanying prospectus. When available, a copy of the preliminary prospectus supplement and accompanying prospectus related to the Senior Notes Offering may be obtained from Merrill Lynch, Pierce, Fenner & Smith Incorporated at (800) 294-1322 (U.S. toll-free) or dg.prospectus_requests@baml.com, Citigroup Global Markets Inc. at (800) 831-9146 (U.S. toll-free), J.P. Morgan Securities LLC (212) 834-4533 (collect), or Wells Fargo Securities LLC at 1525 West W.T. Harris Blvd., NC0675, Charlotte, North Carolina 28262, Attn: Capital Markets Client Support, (800) 326-5897 (U.S. toll-free) or cmclientsupport@wellsfargo.com. Alternatively, you may get these documents for free by visiting EDGAR on the Securities and Exchange Commission website at http://www.sec.gov/. Before you invest, you should read the prospectus supplement related to the Senior Notes Offering, the accompanying prospectus and other documents incorporated by reference in the prospectus supplement and the accompanying prospectus for more complete information about the Senior Notes Offering.