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USG AND AGENT BANKS PROPOSE EXCHANGE OF 10-1/4 PERCENT SENIOR NOTES FOR $142 MILLION OF BANK DEBT

 CHICAGO, July 7 /PRNewswire/ -- USG Corp. announced today that it has made a proposal to its bank group to exchange $142 million of new 10-1/4 percent senior notes due 2002 for $47 million of term capitalized interest notes and $95 million of outstanding term loans. If approved by the bank group, this exchange would eliminate all mandatory bank principal payments due prior to 1997; namely the $25 million, $32 million, and $38 million of bank amortization due in 1994, 1995, 1996.
 As part of this proposal, the bank group would also agree to modify the application of any excess cash sweep prior to 1996. Under this proposed revision to the bank credit agreement, the first $165 million of any excess cash flow generated by USG could be utilized to prepay any public senior debt maturing prior to 1999. Any cash generated by USG during this period in excess of this $165 million threshold would be allocated 2/3 to the repayment of bank term debt in order of maturity, and 1/3 to USG for permitted uses under the bank credit agreement such as capital expenditures, debt repayment and liquidity.
 USG and the agents for its bank group, Citicorp, Bankers Trust and Chemical Bank, presented the proposal to the USG bank group at a meeting held today in Chicago. Two-thirds by principal amount of the bank group are required to approve the proposal in order for the amendment to be effected. The new senior notes are being registered with the Securities and Exchange Commission; a definitive exchange proposal is subject to the effectiveness of such registration.
 USG Corp. is a Fortune 250 company whose subsidiaries are market leaders in their key product groups of gypsum wallboard, joint compound and related gypsum products, ceiling tile and grid and building products distribution.
 -0- 7/7/93
 /CONTACT: USG corporate communications department, 312-606-4124; or investor communications department, 312-606-5594/
 (USG)


CO: USG Corp. ST: Illinois IN: SU:

SM -- NY061 -- 5912 07/07/93 15:44 EDT
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Publication:PR Newswire
Date:Jul 7, 1993
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