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Published on 7/30/2009 in the Prospect News High Yield Daily.

New Issue: USG upsizes to $300 million, prices 9¾% five-year notes at 98.086 to yield 10¼%

By Paul A. Harris

St. Louis, July 30 - USG Corp. priced an upsized $300 million issue of 9¾% five-year senior bullet notes (B1/BB) at 98.086 to yield 10¼% on Thursday, according to an informed source.

The yield was printed at the tight end of the 10¼% to 10½% yield talk, while the issue price came rich to the contemplated discount range of 2 to 4 points. The offering was upsized from $250 million.

JP Morgan and Bank of America Merrill Lynch were joint bookrunners for the deal.

Proceeds will be used for general corporate purposes.

The notes are guaranteed on a senior unsecured basis by certain of the Chicago-based building materials company's domestic subsidiaries.

Issuer: USG Corp.

Face amount:$300 million (increased from $250 million)
Proceeds:$294.258 million
Maturity:Aug. 1, 2014
Security description:Senior notes
Bookrunners:JP Morgan, Bank of America Merrill Lynch
Co-managers:Citigroup, Goldman Sachs & Co., RBS Securities Inc.
Coupon:9¾%
Price:98.086
Yield:10¼%
Spread:752 bps
Call protection:Non-callable, with make-whole provision at Treasuries plus 50 bps
Trade date:July 30
Settlement date:Aug. 4
Ratings:Moody's: B1
Standard & Poor's: BB
Distribution:Rule 144A for life/Regulation S
Price talk:10¼% to 10½% with 2 to 4 points of OID

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