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USG Corporation Announces Notice Of Partial Redemption Of Convertible Senior Notes

USG Corporation (NYSE: USG), a leading building products company, today announced that it has issued a notice of redemption to redeem on December 16, 2013 $325 million in aggregate principal amount of USG’s outstanding $400 million in aggregate principal amount of 10% contingent convertible senior notes due 2018.

The notice of redemption provides that the convertible senior notes called for redemption would be redeemed at a stated redemption price equal to 105% of the aggregate principal amount of such notes, plus accrued and unpaid interest to (but not including) the redemption date.

In lieu of redemption, holders may elect prior to the redemption date to convert their convertible senior notes into shares of USG common stock. The convertible senior notes are convertible into 87.7193 shares of USG common stock per $1,000 principal amount of notes, which is equivalent to a conversion price of $11.40 per share. Based on recent trading prices of USG common stock, USG believes that the holders of the convertible senior notes currently would elect to convert their notes called for redemption rather than receive the redemption price.

To the extent holders of the convertible senior notes do not elect to convert their notes called for redemption prior to the redemption date, USG expects to use a combination of cash, cash equivalents and borrowings under its credit facilities to fund the redemption price.

As previously disclosed, USG’s net operating loss carryforwards would be subject to limitations under the Internal Revenue Code in the event the ownership of certain USG stockholders increases by more than 50% over a three-year period. As a result, USG elected to issue a notice of redemption for less than all of the convertible senior notes outstanding at this time. In addition, USG’s Board of Directors took action to ensure that the issuances of all shares of USG common stock to initial purchasers of the convertible senior notes pursuant to a conversion of their convertible senior notes are exempt transactions under USG’s rights plan.

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