<PAGE>
RULE NO. 424(b)(2)
REGISTRATION NO. 333-47961
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED APRIL 16, 1998
$400,000,000
OWENS CORNING
7 1/2% Debentures due 2018
[LOGO OF OWENS CORNING]
Interest payable August 1 and February 1 Due August 1, 2018
------------
The 7 1/2% Debentures due 2018 (the "Debentures") are being offered by Owens
Corning ("Owens Corning" or the "Company"). The Debentures will be
redeemable, in whole or in part, at the option of the Company at any time
at a redemption price equal to the greater of (i) 100% of the principal
amount of such Debentures or (ii) the sum of the present values of the
remaining scheduled payments of principal and interest (not including
the portion of any such payments of interest accrued as of the
redemption date) discounted to the redemption date on a semiannual
basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate (as defined herein), plus accrued
and unpaid interest thereon to the redemption date. The
Debentures will not be entitled to any sinking fund. The
Debentures will be represented by Book Entry Securities (as
defined herein) registered in the name of The Depository
Trust Company ("DTC") or its nominee. Except as provided
herein and in the accompanying Prospectus, Debentures in
definitive form will not be issued. See "Description
of the Debentures" herein.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS COMPANY(1)(2)
--------- ------------- -------------
<S> <C> <C> <C>
Per Debenture.............................. 99.803% .875% 98.928%
Total...................................... $399,212,000 $3,500,000 $395,712,000
</TABLE>
(1) Plus accrued interest, if any, from July 27, 1998.
(2)Before deduction of expenses payable by the Company estimated at $446,000.
The Debentures are offered by the several Underwriters when, as and if
issued by the Company, delivered to and accepted by the Underwriters and
subject to their right to reject orders in whole or in part. It is expected
that delivery of the Debentures in book-entry form will be made through the
facilities of DTC on or about July 27, 1998, against payment in immediately
available funds.
CREDIT SUISSE FIRST BOSTON
BNY CAPITAL MARKETS, INC.
MERRILL LYNCH & CO.
RBC DOMINION SECURITIES CORPORATION
SCOTIA CAPITAL MARKETS
SG COWEN
Prospectus Supplement dated July 22, 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT-COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING".
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Prospectus Supplement and the accompanying Prospectus and the documents
incorporated by reference therein contain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ materially
from those projected in these statements. Some of the important factors that
may influence possible differences are continued competitive factors and
pricing pressures, construction activity, interest rate movements, issues
involving implementation of new business systems, achievement of expected cost
reductions and asbestos litigation. Further information on factors that could
affect the Company's financial and other results are included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (the
"1997 Form 10-K") and the Company's quarterly report on Form 10-Q for the
quarter ended March 31, 1998 filed with the Securities and Exchange Commission
and incorporated herein by reference.
THE COMPANY
Owens Corning is a world leader in building materials and high performance
glass fiber composites. The Company's products are used in industries such as
home improvement, new construction, transportation, marine, aerospace, energy,
appliance and electronics. The Company is a market leader in each of the North
American markets for insulation, roofing and vinyl siding, and is the world
leader in composites. In 1997, the Building Materials segment accounted for
74% of the Company's total sales and the Composite Materials segment accounted
for 26% of total sales.
BUILDING MATERIALS
The Company's Building Materials business sells a variety of building and
home improvement products in three major categories: (i) glass fiber, foam and
mineral wool insulation, (ii) roofing materials, and (iii) exterior products
for the home, such as vinyl and metal siding and accessories, vinyl windows
and patio doors, rainware (gutters and downspouts), cast stone building
products and housewrap. The Owens Corning name, its trademarked color PINK and
licensed Pink Panther icon and its FIBERGLAS(R) trademark enjoy strong brand
recognition with homeowner consumers in the building materials market.
COMPOSITE MATERIALS
The Company is the world's leading producer of glass fiber materials used in
composites. Composites are fabricated material systems made up of two or more
components (e.g., plastic resin and glass fiber) used in various applications
to replace traditional materials, such as aluminum, wood, and steel. The
global composites industry has expanded to include thousands of end-use
applications. The primary end-use markets that the Company serves are
construction, transportation, and electrical/electronics. In the construction
market, the major end-use application for glass fiber is asphalt roofing
shingles. In the transportation market, glass fiber is used mainly in
automotive and truck parts, a use that is continuing to grow as the amount of
composite materials per vehicle increases. Within the electrical/electronics
markets, glass fiber is used extensively in printed circuit boards made for
the consumer electronics, transportation and telecommunications industries.
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GROWTH STRATEGY
Owens Corning's growth agenda has focused on increasing sales and earnings
by (i) acquiring businesses with products that can be sold through existing or
complementary distribution channels, (ii) achieving productivity improvements
in existing and acquired businesses and (iii) entering new high-growth
markets. The Company is implementing two major initiatives, System Thinking
and Advantage 2000, to achieve productivity improvements across all
businesses. System Thinking for the Home(TM) leverages Owens Corning's broad
product offering and strong brand recognition to increase its share of the
building materials and home improvement markets. This systems approach
represents a shift from product-oriented selling to providing systems-driven
solutions that combine the Company's insulation, roofing, exterior and sound
control systems, to provide a high performance, cost-effective building
"envelope" for the home. In addition, Owens Corning is implementing Advantage
2000, a fully integrated business technology system designed to reduce costs
and improve business processes.
The Company has grown its sales from nearly $3.4 billion in 1994 to
approximately $5.0 billion on a pro forma basis giving effect to acquisitions
made in 1997. Acquisitions have been a significant component of that growth.
Since 1994, the Company completed 17 acquisitions for an aggregate purchase
price of over $1.2 billion. The Company's acquisitions have broadened its
lines of business to include siding, accessories and other home exteriors and
have diversified its materials portfolio beyond fiber glass to include
polymers such as vinyl and styrene, and metal and stone. In 1997, the Company
completed its two largest acquisitions by acquiring Fibreboard Corporation
("Fibreboard") and AmeriMark Building Products, Inc. ("AmeriMark"), making
Owens Corning the leader in the U.S. vinyl siding, siding accessories and cast
stone markets, as well as a large speciality distributor in North America
through nearly 200 company-owned distribution centers.
PRICING ENVIRONMENT
Despite improvements in the Company's strategic position in 1997, the
Company experienced a highly competitive pricing environment in several of its
product markets that negatively impacted financial results. In North America,
insulation pricing decreased by approximately 10 percent over the course of
1997 and worldwide composite pricing decreased by approximately 6 percent from
late 1996 through 1997. Income from operations for 1997 was adversely impacted
by approximately $87 million as a result of price declines in insulation
products and approximately $64 million as a result of price declines affecting
Composite Materials. Offset by small price increases in other businesses, the
net effect of price on 1997 income from operations was approximately $142
million.
In the first and second quarters of 1998, the Company announced price
increases applicable to its residential and industrial insulation products and
certain residential roofing products.
RECENT DEVELOPMENTS
RESTRUCTURING TO IMPROVE PROFITABILITY
As a result of the growth in Owens Corning's business through acquisitions
and the significant pricing pressure the Company experienced in 1997, the
Company has implemented a strategic restructuring program designed to improve
profitability. The restructuring program will streamline the organization,
reduce overhead, enhance manufacturing productivity and close high cost
manufacturing facilities, resulting in a 9 percent reduction (approximately
2,200 people) in the work force worldwide. The Company expects to decrease
operating costs by approximately $100 million in 1998, and by an additional
$75 million when the program is fully implemented in 1999, resulting in
ongoing pre-tax savings of approximately $175 million per year. In addition to
the restructuring savings of $100 million, the Company expects to achieve
approximately $30 million in additional synergies and cost savings in 1998
from integrating the Fibreboard and AmeriMark acquisitions.
The restructuring program and other cost reduction initiatives are expected
to result in a pre-tax charge of $250 million. Approximately $143 million of
the charge was recorded in the fourth quarter of 1997, which is reflected in
the results of operations for the year ended December 31, 1997. Approximately
$95 million of the
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charge was recorded in the first quarter of 1998 and the balance is expected
to be charged during the remainder of the year.
DIVESTITURE PROGRAM
The Company is also focused on divesting certain non-strategic operations to
reduce debt and focus its efforts on core businesses. The divestiture program
is expected to result in net cash proceeds during 1998 of between $400 and
$500 million. In the first quarter of 1998, the Company completed the sale of
the assets of Pabco, a producer of molded calcium silicate insulation,
fireproofing board and metal jacketing, acquired as part of the Fibreboard
acquisition in 1997, and its 50 percent interest in Alpha/Owens Corning LLC, a
manufacturer and marketer of unsaturated polyester and vinylester resins, for
approximately $140 million. In the second quarter of 1998, the Company
announced that it is exploring the possible sale of its Glass Fiber Yarns and
Specialty Materials portion of its Composites Materials business. The Company
continues to evaluate other divestiture opportunities.
SECOND QUARTER 1998 RESULTS
Net sales were $1,286 million, an increase of 26 percent over $1,017 million
recorded in the second quarter of 1997. Acquisitions made in the Company's
Exterior Systems Business during the second half of 1997 were the primary
contributors to the sales increase. Net income was $59 million, or $1.02 per
diluted share in the second quarter, compared to $63 million, or $1.11 per
diluted share reported for the second quarter of 1997.
For the first six months of 1998, net sales were $2,423 million, up 28
percent from $1,892 million in the first half of 1997. Net income was $67
million or $1.20 per diluted share, compared to $105 million or $1.88 per
diluted share in the first half of 1997. Net income for the six months ended
June 30, 1998 included the following items from the first quarter of 1998: a
pre-tax charge of $95 million ($63 million after-tax) for restructuring and
other actions, a pre-tax gain of $84 million ($52 million after-tax) from the
sale of the Company's 50 percent interest in Alpha/Owens Corning LLC and a tax
credit of $13 million associated with Asia Pacific operations. Income from
operations for the six months ended June 30, 1998 was $173 million, compared
to $188 million in the first six months of 1997.
BUILDING MATERIALS
Sales in Building Materials were $995 million for the second quarter of
1998, up 40 percent over the second quarter of 1997. Excluding the Exterior
Systems acquisitions made in the second half of 1997, second quarter sales in
Building Materials were down slightly over the year-ago quarter primarily due
to price.
Volume was basically flat in Building Materials, with an unfavorable
quarter-over-quarter price comparison in the Insulation Systems Business.
Building Materials income from operations was $91 million in the second
quarter of 1998, up 23 percent compared to the second quarter of 1997, despite
the unfavorable price environment.
Although vinyl siding prices were down, margins were maintained in the
Exterior Systems Business due to lower raw material costs, higher volume and
consolidation synergies.
COMPOSITE MATERIALS
Sales in Composite Materials were $291 million in the second quarter of
1998, down 4 percent from the second quarter of 1997, due primarily to volume
declines in the United States. Demand for electronic circuit boards slowed at
the end of the second quarter and sales were impacted by some order
cancellations due to the General Motors strike.
Volume was up in Europe but prices have not recovered from the declines in
1997. Sales were down significantly in Latin America due to a furnace problem
in the Company's Brazilian operations, however Asia Pacific volumes were
stable and the Company continues to grow its share in the region.
Composites income from operations increased to $59 million in the second
quarter of 1998, up 18 percent on slightly lower sales compared to the second
quarter of 1997 due to productivity improvements and cost reductions.
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USE OF PROCEEDS
The net proceeds from the sale of the Debentures offered hereby, after
payment of expenses related to the offering and underwriting discounts and
commissions, are expected to be approximately $395 million. The Company
intends to use the net proceeds to fund the cash tender offers commenced on
July 21, 1998 (the "Tender Offers") for $150,000,000 aggregate principal
amount of the Company's 8 7/8% Debentures due 2002 and $150,000,000 aggregate
principal amount of the Company's 9 3/8% Debentures due 2012 and $150,000,000
aggregate principal amount of O.C. Funding B.V.'s 10% Debentures due 2001 or
to repay a portion of the outstanding borrowings under its revolving credit
agreement dated as of June 26, 1997, as amended (the "Credit Agreement"). The
Company intends to draw $100 million under the Credit Agreement to repay the
principal of its 9.8% Debentures due August 15, 1998 when they mature on
August 15, 1998. The Credit Agreement has a maximum commitment of $1.8 billion
and provides for varying terms and interest rates. The weighted average
interest rate under the Credit Agreement was 6.0% at June 30, 1998. Borrowings
under the Credit Agreement were used to repay the Company's previous U.S. and
Canadian credit facilities and select short-term debt and to fund the
acquisition of Fibreboard.
CAPITALIZATION
The following table summarizes (i) the actual consolidated capitalization of
the Company at June 30, 1998 and (ii) the capitalization of the Company as
adjusted to reflect the issuance of the Debentures offered hereby and the
application of the estimated net proceeds thereof. This table should be read
in conjunction with the Company's Consolidated Financial Statements for the
year ended December 31, 1997 and for the quarter ended March 31, 1998 and
Notes thereto and the Company's Current Report on Form 8-K dated July 17,
1998, incorporated by reference in the accompanying Prospectus.
<TABLE>
<CAPTION>
AT JUNE 30, 1998
---------------------
AS
ACTUAL ADJUSTED(B)
------ -----------
(IN MILLIONS)
<S> <C> <C>
Short-term debt, including current portion of
long-term debt.................................. $ 247(a) $ 247
====== ======
Long-term debt................................... 1,761 1,837
Company obligated securities of entities holding
solely parent debentures
Convertible Monthly Income Preferred Securities
(MIPS)........................................ $ 194 $ 194
Trust Preferred Hybrid Securities.............. 309 309
Stockholders' equity............................. (382) (426)(c)
------ ------
Total capitalization......................... $2,129 $2,161
====== ======
</TABLE>
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(a) Includes $100 million of the Company's 9.8% Debentures due August 15,
1998.
(b) Adjusted to reflect the sale of the Debentures offered hereby and the
completion of the Tender Offers, including the payment of related
premiums, based on certain benchmark treasury rates on July 20, 1998, and
assuming 100% of the securities are purchased pursuant to the Tender
Offers.
(c) Adjusted to reflect the extraordinary loss for the early extinguishment of
debt.
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RATIO OF EARNINGS TO FIXED CHARGES
For purposes of the calculation of the ratio of earnings to fixed charges,
earnings represent net income before fixed charges, provision for taxes on
income, undistributed earnings of equity basis investments, extraordinary
losses from early retirement of debt and the cumulative effect of accounting
changes. Fixed charges include interest expense, the portion (one-third) of
rental expense deemed to be representative of interest and preferred stock
dividends requirements of consolidated subsidiaries. The Company's earnings in
1996 were insufficient to cover fixed charges by approximately $600 million.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------- ---------------------------
1998 1997 1997 1996 1995 1994 1993
----- ----- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed
Charges.......................... 1.69x 3.02x 1.34x -- 3.67x 2.15x 2.42x
</TABLE>
ASBESTOS LITIGATION
Owens Corning is a co-defendant with other former manufacturers,
distributors and installers of products containing asbestos and with miners
and suppliers of asbestos fibers in personal injury litigation. The personal
injury claimants generally allege injuries to their health caused by
inhalation of asbestos fibers from Owens Corning's products. Most of the
claimants seek punitive damages as well as compensatory damages. Virtually all
of the asbestos-related lawsuits against Owens Corning arise out of its
manufacture, distribution, sale or installation of an asbestos-containing
calcium silicate, high temperature insulation product, the manufacture of
which was discontinued in 1972.
For a discussion of the Company's asbestos liabilities, see Note 22 to the
Company's Consolidated Financial Statements for the year ended December 31,
1997 and Note 11 to the Company's Consolidated Financial Statements for the
quarter ended March 31, 1998 incorporated by reference in the accompanying
Prospectus.
DESCRIPTION OF THE DEBENTURES
The following sets forth the particular terms of the Debentures offered
hereby and supplements and should be read in conjunction with the statements
in the accompanying Prospectus under the caption "Description of Debt
Securities." Capitalized terms not otherwise defined herein shall have the
meanings given to them in the accompanying Prospectus.
GENERAL
The Debentures will be issued as a series of Debt Securities under an
Indenture (the "Indenture") dated as of May 5, 1997 between the Company and
The Bank of New York, as Trustee, which is more fully described in the
accompanying Prospectus.
The Debentures will be issued as unsecured obligations of the Company in an
aggregate principal amount of $400,000,000 and will mature on August 1, 2018.
The Debentures will bear interest from July 27, 1998, payable semiannually
in arrears on each February 1 and August 1, commencing February 1, 1999, at
the rate set forth on the cover page of this Prospectus Supplement, to the
persons in whose names the Debentures are registered on the preceding January
15 and July 15, respectively.
The principal of, premium, if any, and interest on the Debentures will be
payable, the transfer of Debentures will be registrable and the Debentures may
be presented for exchange, at the office of the Trustee located at 101 Barclay
Street, Floor 21W., New York, NY 10286, attention: Corporate Trust, Trustee
Administration. So long as the Debentures are represented by Book Entry
Securities, the interest payable on the Debentures will be paid to Cede & Co.,
the nominee of The Depository Trust Company ("DTC"), the Depositary for the
Debentures, or its registered assigns as the registered owner of the Book
Entry Securities, by wire transfer of immediately
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available funds on each of the applicable interest payment dates, not later
than 2:30 p.m. Eastern Standard Time. If the Debentures are no longer
represented by Book Entry Securities, payment of interest may, at the option
of the Company, be made by check mailed to the address of the Person entitled
thereto.
The Debentures will not be subject to any sinking fund.
OPTIONAL REDEMPTION
The Debentures will be redeemable, in whole or in part, at the option of the
Company at any time at a redemption price equal to the greater of (i) 100% of
the principal amount of such Debentures or (ii) the sum of the present values
of the remaining scheduled payments of principal and interest thereon (not
including the portion of any such payments of interest accrued as of the
redemption date) discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate (determined on the third Business Day preceding such redemption
date), plus, in each case, accrued and unpaid interest thereon to the
redemption date.
"Adjusted Treasury Rate" means the arithmetic mean of the yields under the
heading "Week Ending" published in the Statistical Release most recently
published prior to the date of determination under the caption "Treasury
Constant Maturities" for the maturity (rounded to the nearest month)
corresponding to the remaining life to maturity, as of the redemption date, of
the principal being redeemed, plus 0.375%. If no maturity set forth under such
heading exactly corresponds to the maturity of such principal, yields for the
two published maturities most closely corresponding to the maturity of such
principal shall be calculated pursuant to the immediately preceding sentence,
and the Adjusted Treasury Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding in the relevant period to the
nearest month.
"Statistical Release" means the statistical release designated "H.15(519)"
or any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively-traded United States
government securities adjusted to constant maturities, or, if such statistical
release is not published at the time of any determination under the terms of
the Debentures, then such other reasonably comparable index which shall be
designated by the Company.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the Debentures to be
redeemed.
Unless the Company defaults in payment of the redemption price, on and after
the redemption date, interest will cease to accrue on the Debentures or
portions thereof called for redemption.
BOOK ENTRY, DELIVERY AND FORM
The Debentures will be represented by Book Entry Securities that will be
deposited with, or on behalf of, DTC and registered in the name of Cede & Co.,
the nominee of DTC.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities of its participating organizations ("participants") and to
facilitate the clearance and settlement of securities transactions, such as
transfers and pledges, among its participants in such securities through
electronic computerized book-entry changes in accounts of the participants,
thereby eliminating the need for physical movement of securities certificates.
Participants include securities brokers and dealers (including the
Underwriters), banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own DTC. Access to
DTC's book-entry system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a
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custodial relationship with a participant, either directly or indirectly.
Persons who are not participants may beneficially own securities held by DTC
only through participants.
Unless and until they are exchanged in whole or in part for certificated
Debentures, in definitive form, the Book Entry Securities may not be
registered for transfer or exchange except as a whole by DTC to a nominee of
DTC or by a nominee of DTC to DTC or another nominee of DTC or by DTC or any
such nominee to a successor depository or a nominee of such successor
depository.
A further description of DTC's procedures with respect to the Debentures is
set forth in the accompanying Prospectus under the heading "Description of
Debt Securities--Book Entry Debt Securities."
DEFEASANCE
The provisions described under "Description of Debt Securities--Defeasance
of Offered Debt Securities or Certain Covenants in Certain Circumstances" in
the accompanying Prospectus are applicable to the Debentures.
UNDERWRITING
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated July 22, 1998 (the "Underwriting Agreement") and the related
Pricing Agreement dated July 22, 1998 (the "Pricing Agreement"), the
Underwriters named below (the "Underwriters") have severally but not jointly
agreed to purchase from the Company the following respective principal amounts
of the Debentures:
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITER AMOUNT
----------- ------------
<S> <C>
Credit Suisse First Boston Corporation...................... $200,000,000
BNY Capital Markets, Inc.................................... 40,000,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated.......... 40,000,000
RBC Dominion Securities Corporation......................... 40,000,000
Scotia Capital Markets (USA) Inc. .......................... 40,000,000
SG Cowen Securities Corporation............................. 40,000,000
------------
Total................................................... $400,000,000
============
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will be
obligated to purchase all the Debentures, if any are purchased. The
Underwriting Agreement provides that, in the event of a default by an
Underwriter, in certain circumstances the purchase commitments of non-
defaulting Underwriters may be increased or the Underwriting Agreement may be
terminated.
The Company has been advised by the Underwriters that the Underwriters
propose to offer the Debentures to the public initially at the public offering
price set forth on the cover page of this Prospectus Supplement and to certain
dealers at such price less a concession of 0.50% of the principal amount per
Debenture, and the Underwriters and such dealers may allow a discount of 0.25%
of such principal amount per Debenture on sales to certain other dealers.
After the initial public offering, the public offering price and concession
and discount to dealers may be changed by the Underwriters.
The Debentures are a new issue of securities with no established trading
market. The Underwriters have advised the Company that they intend to act as
market makers for the Debentures. However, the Underwriters are not obligated
to do so and may discontinue any market making at any time without notice. No
assurance can be given as to the liquidity of the trading market for the
Debentures.
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<PAGE>
The Bank of New York, Royal Bank of Canada, Societe Generale, The Bank of
Nova Scotia and Credit Suisse First Boston are affiliates of BNY Capital
Markets, Inc., RBC Dominion Securities Corporation, SG Cowen, Scotia Capital
Markets (USA) Inc. and Credit Suisse First Boston Corporation, respectively,
and are lenders under the Credit Agreement and have in the past, and may in
the future, engage in other commercial banking transactions with the Company.
The Company may use a portion of the net proceeds of this offering to repay in
part amounts outstanding under the Credit Agreement, and such lenders may
receive in excess of 10% of such net proceeds (not including underwriting
compensation). Because more than 10% of the net proceeds of the offering may
be received by entities affiliated with members of the National Association of
Securities Dealers, Inc. (the "NASD") participating in the offering made
hereby, the offering is being conducted pursuant to Rule 2710(c)(8) of the
Conduct Rules of the NASD. In addition, Merrill Lynch, Pierce, Fenner & Smith
Incorporated is acting as dealer manager of the Tender Offers. The Bank of New
York is also Trustee under the Indenture.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act, or
contribute to payments which the Underwriters may be required to make in
respect thereof.
The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids. Over-allotment involves
syndicate sales in excess of the offering size, which creates a syndicate
short position. Stabilizing transactions permit bids to purchase the
underlying security so long as the stabilizing bids do not exceed a specified
maximum. Syndicate covering transactions involve purchases of the Debentures
in the open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Underwriters to reclaim a
selling concession from a broker-dealer when the Debentures originally sold by
such broker-dealer are purchased in a syndicate covering transaction to cover
syndicate short positions. Such stabilizing transactions, syndicate covering
transactions and penalty bids may cause the price of the Debentures to be
higher than it would otherwise be in the absence of such transactions.
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the Debentures in Canada is being made only on a private
placement basis exempt from the requirement that the Company prepare and file
a prospectus with the securities regulatory authorities in each province where
trades of Debentures are effected. Accordingly, any resale of the Debentures
in Canada must be made in accordance with applicable securities laws, which
will vary depending on the relevant jurisdiction, and which may require
resales to be made in accordance with available statutory exemptions or
pursuant to a discretionary exemption granted by the applicable Canadian
securities regulatory authority. Purchasers are advised to seek legal advice
prior to any resale of the Debentures.
REPRESENTATIONS OF PURCHASERS
Each purchaser of Debentures in Canada who receives a purchase confirmation
will be deemed to represent to the Company and the dealer from whom such
purchase confirmation is received that (i) such purchaser is entitled under
applicable provincial securities laws to purchase such Debentures without the
benefit of a prospectus qualified under such securities laws, (ii) where
required by law, that such purchaser is purchasing as principal and not as
agent, and (iii) such purchaser has reviewed the text above under "Resale
Restrictions".
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
section 32 of the Regulation under the Securities Act (Ontario). As a result,
Ontario purchasers must rely on other remedies that may be available,
including common law rights of
S-9
<PAGE>
action for damages or rescission or rights of action under the civil liability
provisions of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be
possible for Canadian purchasers to effect service of process within Canada
upon the issuer or such persons. All or a substantial portion of the assets of
the issuer and such persons may be located outside of Canada and, as a result,
it may not be possible to satisfy a judgment against the issuer or such
persons in Canada or to enforce a judgment obtained in Canadian courts against
such issuer or persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of Debentures to whom the Securities Act (British Columbia)
applies is advised that such purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
Debentures acquired by such purchaser pursuant to this offering. Such report
must be in the form attached to British Columbia Securities Commission Blanket
Order BOR #95/17, a copy of which may be obtained from the Company. Only one
such report must be filed in respect of Debentures acquired on the same date
and under the same prospectus exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of Debentures should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the
Debentures in their particular circumstances and with respect to the
eligibility of the Debentures for investment by the purchaser under relevant
Canadian Legislation.
VALIDITY OF THE DEBENTURES
The validity of the Debentures offered hereby will be passed upon for the
Company by Shearman & Sterling, New York, New York and for the Underwriters by
Sullivan & Cromwell, Los Angeles, California.
S-10
<PAGE>
U.S. $1,000,000,000
OWENS CORNING
DEBT SECURITIES
----------------
Owens Corning (the "Company") may from time to time offer its unsecured debt
securities consisting of notes, debentures or other evidences of indebtedness
(the "Debt Securities") which may be issued in one or more series or issuances
and will be limited to U.S. $1,000,000,000 aggregate public offering price (or
such greater amount if issued at an original issue discount, as shall result
in aggregate proceeds of U.S. $1,000,000,000). Certain specific terms of the
particular series of Debt Securities in respect of which this Prospectus is
being delivered are set forth in the accompanying Prospectus Supplement (the
"Prospectus Supplement"), including the specific designation, the aggregate
principal amount, the denomination, the maturity, the premium, if any, the
interest rate (which may be fixed, floating or adjustable rate), if any, the
method of calculating payment of interest, if any, the place or places where
principal of, and premium, if any, and interest, if any, on, such Debt
Securities will be payable, any terms of redemption at the option of the
Company or of the holder, any sinking fund provisions, the initial public
offering price and other specific terms. Unless otherwise specified in a
Prospectus Supplement, the Debt Securities, when issued, will be unsecured and
will rank equally with all other unsecured and unsubordinated indebtedness of
the Company.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------
The Company may sell the Debt Securities to or through underwriters, through
dealers or agents, directly to purchasers or through a combination of such
methods. See "Plan of Distribution". The accompanying Prospectus Supplement
sets forth the names of any underwriters, dealers or agents, if any, involved
in the sale of the Debt Securities in respect of which this Prospectus is
being delivered and any applicable fee, commission or discount arrangements
with them.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF DEBT SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
----------------
The date of this Prospectus is April 16, 1998.
<PAGE>
No dealer, salesperson or other person has been authorized to give any
information or make any representations, other than those contained or
incorporated by reference in this Prospectus and the applicable Prospectus
Supplement, and if given or made such information or representations must not
be relied upon as having been authorized by the Company or any agent,
underwriter or dealer. This Prospectus and the applicable Prospectus
Supplement do not constitute an offer of any securities other than those to
which they relate, or an offer to sell or a solicitation of an offer to buy
those to which they relate in any jurisdiction to any person to whom it is
unlawful to make such offer or solicitation in such jurisdiction. The delivery
of this Prospectus and/or the applicable Prospectus Supplement at any time
does not imply that the information herein or therein is correct as of any
time subsequent to its date.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission can
be inspected and copied at the public reference facilities of the Commission
at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission located at 7 World Trade Center, 13th
Floor, Suite 1300, New York, New York 10048 and Suite 1400, Citicorp Center,
14th Floor, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549. The Commission also maintains a site on the world wide web at
http://www.sec.gov that contains reports, proxy and information statements and
other information filed electronically by the Company. In addition, such
reports, proxy statements and other information may be inspected at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005, upon which the common stock of the Company is traded.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by the Company with the Commission under the Securities Act
of 1933, as amended (the "Securities Act"). This Prospectus and any
accompanying Prospectus Supplement do not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Debt Securities offered
hereby, reference is made to the Registration Statement and the exhibits and
the financial statements, notes and schedules filed as a part thereof or
incorporated by reference therein, which may be inspected at the public
reference facilities of the Commission, at the addresses set forth above.
Statements made in this Prospectus and any Prospectus Supplement concerning
the contents of any documents referred to herein are not necessarily complete,
and in each instance are qualified in all respects by reference to the copy of
such document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following document filed by the Company with the Commission pursuant to
the Exchange Act is incorporated herein by reference:
(1) the Company's Annual Report on Form 10-K (File No. 1-3660) for the
fiscal year ended December 31, 1997, filed on March 13, 1998 (the "1997 Form
10-K").
(2) the Company's Current Reports on Form 8-K, filed on January 9, 1998 and
on April 16, 1998.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date hereof
and prior to the termination of the offering of the Debt Securities shall
hereby be deemed to be incorporated by reference into this Prospectus and to
be a part of this Prospectus from the date of filing of such documents. Any
statement contained herein, or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that any statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein or
in any accompanying Prospectus Supplement modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of the Registration
Statement or this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents described above and incorporated by reference
herein (not including the exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents). Written or
telephone requests should be directed to: Owens Corning, One Owens Corning
Parkway, Toledo, Ohio 43659, Attention: Secretary's Office (telephone: (419)
248-8000).
3
<PAGE>
THE COMPANY
Owens Corning, a global company incorporated in Delaware in 1938, serves
consumers and industrial customers with high-performance glass composites and
building materials systems. These products are used in industries such as home
improvement, new construction, transportation, marine, aerospace, energy,
appliance, packaging and electronics. Many of these products are marketed
under the trademark FIBERGLAS(R) and/or the color PINK trademark. The Company
operates in two industry segments--Building Materials and Composite Materials.
Owens Corning acquired Fibreboard Corporation and AmeriMark Building Products,
Inc. in 1997, making Owens Corning the leader in the U.S. vinyl siding, siding
accessories and cast stone markets, as well as providing the Company with a
large network of company-owned specialty distribution centers. These
operations are included in the Building Materials segment. The Company also
has affiliate companies in a number of countries.
The Company's principal executive offices are located at Owens Corning World
Headquarters, Toledo, Ohio 43659, and its telephone number is (419) 248-8000.
Unless the context indicates otherwise, references in this Prospectus to the
"Company" include Owens Corning and its consolidated subsidiaries.
USE OF PROCEEDS
Except as set forth in a Prospectus Supplement, the Company intends to use
the net proceeds from the sale of the Debt Securities for general corporate
purposes, including, without limitation, working capital, capital
expenditures, investments in or loans to subsidiaries, repurchases or
redemptions of the Company's outstanding debt securities or other reductions
of the Company's outstanding borrowings, possible future business
acquisitions, the satisfaction of other obligations or for such other purposes
as may be specified in the applicable Prospectus Supplement.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture (as amended or
supplemented from time to time, the "Indenture") between the Company and The
Bank of New York, as Trustee (the "Trustee"), a copy of which is filed as an
exhibit to the Registration Statement. The statements herein relating to the
Debt Securities and the following summaries of certain provisions of the
Indenture do not purport to be complete and are subject to, and are qualified
in their entirety by reference to, all the provisions of the Indenture,
including the definitions therein of certain terms, and the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). Wherever particular
sections or defined terms of the Indenture are referred to in this section or
in a Prospectus Supplement, such sections or defined terms are incorporated
herein or therein by reference.
The following sets forth certain general terms and provisions of the Debt
Securities offered hereby. The particular terms of the Debt Securities offered
by any Prospectus Supplement (the "Offered Debt Securities") will be described
in the Prospectus Supplement relating to such Offered Debt Securities (the
"Applicable Prospectus Supplement").
CERTAIN DEFINITIONS
"Attributable Debt" will be defined to mean the total net amount of rent
(discounted at the rate of 12% per annum compounded semiannually) required to
be paid under a lease during the remaining term of such lease.
"Consolidated Net Tangible Assets" will be defined as the aggregate amount
of assets after deducting therefrom (a) all current liabilities (excluding any
thereof constituting Funded Debt by reason of being renewable or extendable)
and (b) all goodwill, trade names, trademarks, patents, unamortized debt
discount and expense and other like intangibles, all as set forth on the most
recent balance sheet of the Company and its consolidated subsidiaries and
computed in accordance with generally accepted accounting principles.
"Debt" will be defined as notes, bonds, debentures or other similar
evidences of indebtedness for money borrowed.
4
<PAGE>
"Funded Debt" will be defined as all indebtedness for money borrowed, or
evidenced by a bond, debenture, note or similar instrument or agreement
whether or not for money borrowed, having a maturity of more than 12 months
from the date as of which the amount thereof is to be determined or having a
maturity of less than 12 months but by its terms being renewable or extendable
beyond 12 months from such date at the option of the borrower.
"Mortgage" will be defined as any pledge, mortgage or other lien.
"Principal Property" will be defined as any facility (together with the land
upon which it is erected and fixtures comprising a part thereof) used
primarily for manufacturing, processing or warehousing, located in the United
States, and having a gross book value as of the date of determination thereof
in excess of 1% of Consolidated Net Tangible Assets, other than any such
facility or portion thereof (i) which is financed by means of industrial
revenue bonds or (ii) which, in the opinion of the Board of Directors of the
Company, is not of material importance to the total business conducted by the
Company and its Subsidiaries as an entirety.
"Restricted Subsidiary" will be defined as a Subsidiary of the Company which
owns any Principal Property.
"Subsidiary" will be defined as a corporation at least a majority of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company and/or one or more Subsidiaries of the Company.
GENERAL
The Indenture does not limit the amount of Debt Securities that may be
issued thereunder and Debt Securities may be issued thereunder from time to
time in one or more series. The Debt Securities will be unsecured and
unsubordinated obligations of the Company and will rank equally and ratably
with other unsecured and unsubordinated obligations of the Company.
Unless otherwise indicated in the Applicable Prospectus Supplement,
principal of, premium, if any, and interest on the Debt Securities will be
payable, and the transfer of Debt Securities will be registrable, at the
office or agency to be maintained by the Company in The City of New York and
at any other office or agency maintained by the Company for such purpose.
(Sections 301, 305 and 1002) The Debt Securities will be issued only in fully
registered form without coupons and, unless otherwise indicated in the
Applicable Prospectus Supplement, in denominations of $1,000 or integral
multiples thereof. (Section 302) No service charge will be made for any
registration of transfer or exchange of the Debt Securities, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
change imposed in connection therewith. (Section 305)
The Applicable Prospectus Supplement will describe the terms of the Offered
Debt Securities, including: (1) the title of the Offered Debt Securities; (2)
any limit on the aggregate principal amount of the Offered Debt Securities;
(3) the person or entity to whom any interest on the Offered Debt Securities
shall be payable, if other than the person or entity in whose name that
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, (4) the date or dates
on which the principal of and premium, if any, on the Offered Debt Securities
is payable or the method of determination thereof; (5) the rate or rates at
which the Offered Debt Securities shall bear interest, if any, the date or
dates from which any such interest shall accrue or the method by which such
date or dates shall be determined, the Interest Payment Dates on which any
such interest shall be payable and the Regular Record Date for interest
payable on any Interest Payment Date; (6) the place or places where the
principal of, premium, if any, and interest on the Offered Debt Securities
shall be payable; (7) the period or periods within which, the price or prices
at which, the currency or currencies (including currency units) in which and
the other terms and conditions upon which the Offered Debt Securities may be
redeemed, in whole or in part, at the option of the Company, (8) the
obligation, if any, of the Company to redeem or purchase the Offered Debt
Securities pursuant to any sinking fund or analogous provisions or at the
option of a holder thereof and the period or periods within which, the price
or prices at which
5
<PAGE>
and the other terms and conditions upon which the Offered Debt Securities
shall be redeemed or purchased, in whole or in part, pursuant to such
obligation; (9) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which the Offered Debt Securities shall
be issuable; (10) the currency, currencies or currency units in which payment
of the principal of and any premium and interest on any Offered Debt
Securities shall be payable if other than the currency of the United States of
America; (11) if the amount of payments of principal of or any premium or
interest on any Offered Debt Securities may be determined with reference to an
index, formula or other method, the index, formula or other method by which
such amounts shall be determined; (12) if the principal of or any premium or
interest on any Offered Debt Securities is to be payable, at the election of
the Company or a holder thereof, in one or more currencies or currency units
other than that or those in which the Debt Securities are stated to be
payable, the currency, currencies or currency units in which payment of the
principal of and any premium and interest on the Offered Debt Securities as to
which such election is made shall be payable, and the periods within which and
the other terms and conditions upon which such election is to be made; (13) if
other than the principal amount thereof, the portion of the principal amount
of the Offered Debt Securities which shall be payable upon declaration of
acceleration of the maturity thereof or the method by which such portion may
be determined; (14) the applicability of the provisions described under "--
Defeasance of Offered Debt Securities or Certain Covenants in Certain
Circumstances"; (15) if the Offered Debt Securities will be issuable only in
the form of a Book Entry Security as described under "--Book Entry Debt
Securities", the Depositary or its nominee with respect to the Offered Debt
Securities and the circumstances under which the Book Entry Security may be
registered for transfer or exchange or authenticated and delivered in the name
of a person or entity other than the Depositary or its nominee; and (16) any
other terms of the Offered Debt Securities. The Company does not intend to
issue these Debt Securities in any currency other than U.S. dollars. (Section
301)
Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time
of issuance is below market rates. Material U.S. federal income tax
consequences and special considerations applicable to any such Debt Securities
will be described in the Applicable Prospectus Supplement.
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest, if any, on any series of Debt Securities,
material U.S. federal income tax, accounting and other considerations
applicable thereto will be described in the Applicable Prospectus Supplement.
BOOK ENTRY DEBT SECURITIES
The following description of Book Entry Securities will apply to any series
of Debt Securities except as otherwise provided in the Prospectus Supplement
relating thereto.
The Debt Securities of a series may be issued in the form of one or more
Book Entry Securities that will be deposited with or on behalf of a
Depositary, which will be a clearing agent registered under the Exchange Act.
Book Entry Securities will be registered in the name of the Depositary or a
nominee of the Depositary, will be deposited with such Depositary or nominee
or a custodian therefor and will bear a legend regarding the restrictions on
exchanges and registration of transfer thereof and any such other matters as
may be provided for pursuant to the Indenture. Unless and until it is
exchanged in whole or in part for Debt Securities in definitive certificated
form, a Book Entry Security may not be transferred or exchanged except as a
whole by the Depositary for such Book Entry Security to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary for such series or a nominee of such successor
Depositary, or except in the circumstances described in the Applicable
Prospectus Supplement. (Section 305)
Upon the issuance of any Book Entry Security, and the deposit of such Book
Entry Security with or on behalf of the Depositary for such Book Entry
Security, the Depositary will credit on its book-entry registration
6
<PAGE>
and transfer system the respective principal amounts of the Debt Securities
represented by such Book Entry Security to the accounts of institutions
("Participants") that have accounts with the Depositary. The accounts to be
credited will be designated by the underwriters or agents engaging in the
distribution of such Debt Securities or by the Company, if such Debt
Securities are offered and sold directly by the Company. Ownership of
beneficial interests in a Book Entry Security will be limited to Participants
or persons that may hold interests through Participants. Ownership of
beneficial interests in a Book Entry Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained
by the Depositary for such Book Entry Security or by its nominee. Ownership of
beneficial interests in such Book Entry Security by persons who hold through
Participants will be shown on, and the transfer of such beneficial interests
within such Participants will be effected only through, records maintained by
such Participants. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in
definitive form. Such laws may impair the ability to transfer beneficial
interests in such a Book Entry Security.
So long as the Depositary for a Book Entry Security, or its nominee, is the
owner of such Book Entry Security, such Depositary or such nominee, as the
case may be, will be considered the sole owner or holder of the Debt Security
represented by such Book Entry Security for all purposes under the Indenture.
Accordingly, each person owning a beneficial interest in such Book Entry
Security must rely on the procedures of the Depositary and, if such person is
not a Participant, on the procedures of the Participant through which such
person owns its interest, to exercise any rights of a holder under such
Indenture. The Company understands that under existing industry practices, if
it requests any action of holders or if an owner of a beneficial interest in a
Book Entry Security desires to give or take any instruction or action which a
holder is entitled to give or take under the Indenture, the Depositary would
authorize the Participants holding the relevant beneficial interests to give
or take such instruction or action, and such Participants would authorize
beneficial owners owning through such Participants to give or take such
instruction or action or would otherwise act upon the instructions of
beneficial owners holding through them.
Unless otherwise specified in the Applicable Prospectus Supplement, payments
with respect to principal, premium, if any, and interest, if any, on the Debt
Securities represented by a Book Entry Security registered in the name of the
Depositary or its nominee will be made to such Depositary or its nominee, as
the case may be, as the registered owner of such Book Entry Security. The
Company expects that the Depositary for any Debt Securities represented by a
Book Entry Security, upon receipt of any payment of principal or interest in
respect of such Book Entry Security, will credit immediately Participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the Book Entry Security as shown on the records of the
Depositary. The Company also expects that payments by Participants to owners
of beneficial interests in such Book Entry Security held through such
Participants will be governed by standing instructions and customary
practices, as is now the case with securities in bearer form held for the
accounts of customers or registered in "street name", and will be the
responsibility of such Participants. None of the Company, the Trustee or any
agent of the Company or the Trustee shall have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial interests in any Book Entry Security, or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
A Book Entry Security shall be exchangeable for Debt Securities in
certificated registered form, of like tenor and of an equal aggregate
principal amount, only if (a) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for such Book Entry Security or
if at any time the Depositary ceases to be a clearing agency registered under
the Exchange Act, (b) the Company in its sole discretion determines that such
Book Entry Security shall be exchangeable for Debt Securities in certificated
registered form or (c) there shall have occurred and be continuing an Event of
Default with respect to the Debt Securities. Any Book Entry Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for Debt
Securities registered in the name or names of such person or persons as the
Depositary shall instruct the Trustee. It is expected that such instructions
may be based upon directions received by the Depositary from its participants
with respect to ownership of beneficial interests in such Book Entry Security.
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<PAGE>
CERTAIN COVENANTS OF THE COMPANY
Restrictions on Secured Debt
If subsequent to the date of the initial issuance of the Debt Securities of
any series, the Company or any Subsidiary shall incur, issue, assume or
guarantee any Debt secured by a Mortgage on any Principal Property owned by
the Company or any Restricted Subsidiary or on any shares of stock or Debt of
any Restricted Subsidiary, the Company will secure, or cause such Subsidiary
to secure, such Debt Securities equally and ratably with (or prior to) such
secured Debt, unless after giving effect thereto the aggregate amount of all
such Debt so secured together with all Attributable Debt in respect of sale
and leaseback transactions involving Principal Properties owned by the Company
or a Restricted Subsidiary and otherwise prohibited by the Indenture would not
exceed 10% of the Consolidated Net Tangible Assets. This restriction will not
apply to, and therefore the following shall be excluded in computing secured
Debt for the purpose of such restriction: Debt secured by (a) Mortgages on
property of, or on any shares of stock or Debt of, any corporation existing at
the time such corporation becomes a Restricted Subsidiary, (b) Mortgages in
favor of the Company or any Restricted Subsidiary, (c) Mortgages in favor of
the United States of America, or any agency, department or other
instrumentality thereof, to secure progress, advance or other payments
pursuant to any contract or provision of any statute, (d) Mortgages on
property, shares of stock or Debt existing at the time of acquisition thereof
(including acquisition through merger or consolidation) and purchase money
Mortgages and construction cost Mortgages (including those incurred within 120
days following the purchase or completion of the property in question) and (e)
any extension, renewal or replacement of any Mortgage referred to in the
foregoing clauses (a) through (d) inclusive. The Indenture will not restrict
the incurring of unsecured Debt by the Company or its Subsidiaries.
Restrictions on Sales and Leasebacks
Neither the Company nor any Restricted Subsidiary may enter into any sale
and leaseback transaction involving any Principal Property owned by the
Company or any Restricted Subsidiary, the acquisition of which, or completion
of construction and commencement of full operation of which, has occurred more
than 120 days prior to such sale and leaseback transaction, unless (a) the
Company or such Restricted Subsidiary could create Debt secured by a Mortgage
on such property in accordance with the immediately preceding paragraph in an
amount equal to the Attributable Debt with respect to the sale and leaseback
transaction without equally and ratably securing the Outstanding Debt
Securities or (b) the Company, within 120 days after the sale or transfer of
such property, applies to the retirement of its Funded Debt an amount equal to
the greater of (i) the net proceeds of the sale of the Principal Property sold
and leased back pursuant to such arrangement or (ii) the fair market value of
the Principal Property so sold and leased back, subject to credits for certain
voluntary retirements of Funded Debt. This restriction will not apply to any
sale and leaseback transaction (a) between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries or (b) involving a lease for a
period of three years or less.
Unless otherwise indicated in the Applicable Prospectus Supplement, the
Indenture does not contain covenants specifically designed to protect holders
of Debt Securities in the event of a highly leveraged transaction,
restructuring, change in control, merger or similar transaction involving the
Company that may adversely affect holders of Debt Securities.
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Debt Securities of any series: (a) failure to
pay any interest on any Debt Security of that series when due, continued for
30 days; (b) failure to pay principal of or any premium on any Debt Security
of that series when due; (c) failure to deposit any sinking fund payment, when
due, in respect of any Debt Security of that series; (d) failure to perform,
or breach of, any covenant or warranty of the Company in the Indenture with
respect to Debt Securities of that series continued for 60 days after written
notice as provided in the Indenture; (e) certain
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<PAGE>
events of bankruptcy, insolvency or reorganization of the Company; or (f) any
other Event of Default provided with respect to Debt Securities of that
series. (Section 501)
If any Event of Default with respect to the Debt Securities of any series at
the time outstanding occurs and is continuing, either the Trustee or the
holders of at least 25% in aggregate principal amount of the Outstanding Debt
Securities of that series may declare the principal amount (or, if the Debt
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms thereof) of all the
Debt Securities of that series to be due and payable immediately. At any time
after a declaration of acceleration with respect to Debt Securities of any
series has been made, but before a judgment or decree based on acceleration
has been obtained, the holders of a majority in aggregate principal amount of
Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration. (Section 502)
Reference is made to the Applicable Prospectus Supplement relating to any
series of Offered Debt Securities that are Original Issue Discount Securities
for the particular provisions relating to acceleration of the Stated Maturity
of a portion of the principal amount of such series of Original Issue Discount
Debt Securities upon the occurrence of an Event of Default and the
continuation thereof.
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee will be under
no obligation to exercise any of its rights or powers under the Indenture at
the request or direction of any of the holders of Debt Securities, unless such
holders shall have offered to the Trustee reasonable indemnity. (Section 603)
Subject to such provisions for the indemnification of the Trustee and to
certain other conditions, the holders of a majority in aggregate principal
amount of the Outstanding Debt Securities of any series will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Debt Securities of that series. (Section 512)
No holder of any series of Debt Securities will have any right to institute
any proceeding with respect to the Indenture or for any remedy thereunder,
unless such holder shall have previously given to the Trustee written notice
of a continuing Event of Default and unless the holders of at least 25% in
principal amount of the Outstanding Debt Securities of that series shall have
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of that series a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
(Section 507) However, such limitations do not apply to a suit instituted by a
holder of a Debt Security for enforcement of payment of the principal of and
premium, if any, or interest on such Debt Security on or after the respective
due dates expressed in such Debt Security. (Section 508)
The Company is required to furnish to the Trustee annually a statement as to
the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1004)
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee without the consent of the holders of any of the Debt Securities
in order (i) to evidence the succession of another entity to the Company and
the assumption of the covenants and obligations of the Company under the Debt
Securities and the Indenture by such successor to the Company; (ii) to add to
the covenants of the Company for the benefit of the holders of all or any
series of Debt Securities or surrender any right or power conferred on the
Company by the Indenture; (iii) to add additional Events of Default with
respect to any series of Debt Securities; (iv) to add to or change any
provisions to such extent as necessary to facilitate the issuance of Debt
Securities in bearer form or to facilitate the issuance of Book Entry
Securities; (v) to add to, change or eliminate any provision
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<PAGE>
affecting only Debt Securities not yet issued; (vi) to secure the Debt
Securities; (vii) to establish the form or terms of Debt Securities of any
series; (viii) to evidence and provide for successor Trustees or to add or
change any provisions to such extent as necessary to provide for or facilitate
the appointment of a separate Trustee or Trustees for specific series of Debt
Securities; (ix) to permit payment in respect of Debt Securities in bearer
form in the United States to the extent allowed by law; (x) to cure any
ambiguity, to correct or supplement any mistaken or inconsistent provisions or
to make any other provisions with respect to matters or questions arising
under the Indenture, provided that any such action (other than in respect of a
mistaken provision) does not adversely affect in any material respect the
interests of any holder of Debt Securities of any series then outstanding.
(Section 901)
Modifications and amendments of the Indenture also may be made by the
Company and the Trustee with the consent of the holders of not less than a
majority in aggregate principal amount of the Outstanding Debt Securities of
each series issued under the Indenture and affected by the modification or
amendments; provided, however, that no such modification or amendment may,
without the consent of the Holders of all Debt Securities affected thereby,
(i) change the Stated Maturity of the principal amount of, or any installment
of principal of or interest on, any Debt Security; (ii) reduce the principal
amount of, or the premium, if any, or (except as otherwise provided in the
Applicable Prospectus Supplement) interest on, any Debt Security (including in
the case of an Original Issue Discount Security the amount payable upon
acceleration of the maturity thereof); (iii) change the place or currency of
payment of principal of, premium, if any, or interest on any Debt Security;
(iv) impair the right to institute suit for the enforcement of any payment on
any Debt Security on or after the Stated Maturity thereof (or in the case of
redemption, on or after the Redemption Date); or (v) reduce the percentage in
principal amount of Outstanding Debt Securities of any series, the consent of
whose holders is required for modification or amendment of the Indenture or
for waiver of compliance with certain provisions of the Indenture or for
waiver of certain defaults. (Section 902)
The holders of at least a majority in aggregate principal amount of the
Outstanding Debt Securities of any series may, on behalf of all holders of
Debt Securities of that series, waive compliance by the Company with certain
restrictive provisions of the Indenture. (Section 1010) The holders of not
less than a majority in aggregate principal amount of the Outstanding Debt
Securities of any series may, on behalf of all holders of Debt Securities of
that series, waive any past default under the Indenture, except a default in
the payment of principal, premium or interest or in respect of a covenant or
provision of the Indenture that cannot be modified or amended without the
consent of the holder of each Outstanding Debt Security of such series
affected thereby. (Section 513)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not consolidate with or merge with or into any other entity
or transfer or lease its assets substantially as an entirety to any entity,
unless (i) either the Company is the continuing corporation, or any successor
or purchaser is a corporation, partnership or trust organized under the laws
of the United States of America, any State thereof or the District of
Columbia, and any such successor or purchaser expressly assumes the Company's
obligations on the Debt Securities under a supplemental indenture, (ii)
immediately after giving effect to the transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an Event
of Default, shall have occurred and be continuing, (iii) if properties or
assets of the Company become subject to a Mortgage not permitted by the
Indenture, the Company or such successor entity, as the case may be, takes
such steps as shall be necessary effectively to secure the Debt Securities
equally and ratably with (or prior to) all Debt secured thereby, and (iv) if a
supplemental indenture is to be executed in connection with such
consolidation, merger, transfer or lease, the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel stating compliance
with these provisions. (Section 801)
DEFEASANCE OF OFFERED DEBT SECURITIES OR CERTAIN COVENANTS IN CERTAIN
CIRCUMSTANCES
Defeasance and Discharge
The Indenture provides that the terms of any series of Debt Securities may
provide that the Company, at the Company's option, will be discharged from any
and all obligations in respect of the Debt Securities of such series
10
<PAGE>
(except for certain obligations to register the transfer or exchange of Debt
Securities of such series, to replace stolen, lost or mutilated Debt
Securities of such series, to maintain paying agencies and to hold moneys for
payment in trust) upon the deposit with the Trustee, in trust, of money and/or
U.S. Government Obligations which, through the payment of interest and
principal thereof in accordance with their terms, will provide money in an
amount sufficient to pay any installment of principal (and premium, if any)
and interest on, and any mandatory sinking fund payments in respect of, the
Debt Securities of such series on the stated maturity of such payments in
accordance with the terms of the Indenture and such Debt Securities. Such
discharge may only occur if, among other things, the Company has delivered to
the Trustee an opinion of counsel to the effect that the Company has received
from, or there has been published by, the United States Internal Revenue
Service a ruling, or there has been a change in tax law, in either case to the
effect that such discharge will not be deemed, or result in, a taxable event
with respect to holders of the Debt Securities of such series. (Sections 1302
and 1304)
Defeasance of Certain Covenants
The Indenture provides that the terms of any series of Debt Securities may
provide the Company with the option to omit to comply with certain restrictive
covenants described in this Prospectus under "--Certain Covenants of the
Company--Restrictions on Secured Debt", "--Certain Covenants of the Company--
Restrictions on Sales and Leasebacks" and "--Consolidation, Merger and Sale of
Assets". The Company, in order to exercise such option, will be required to
deposit with the Trustee money and/or U.S. Government Obligations which,
through the payment of interest and principal thereof in accordance with their
terms, will provide money in an amount sufficient to pay principal (and
premium, if any) and interest on, and any mandatory sinking fund payments in
respect of, the Debt Securities of such series on the stated maturity of such
payments in accordance with the terms of the Indenture and such Debt
Securities. The Company will also be required to deliver to the Trustee an
opinion of counsel to the effect that the deposit and related covenant
defeasance will not cause the holder of the Debt Securities of such series to
recognize income, gain or loss for federal income tax purposes. (Sections 1303
and 1304)
In the event the Company exercises this option and the Debt Securities of
such series are declared due and payable because of the occurrence of any
Event of Default, the amount of money and U.S. Government Obligations on
deposit with the Trustee will be sufficient to pay amounts due on the Debt
Securities of such series at the time of their stated maturity but may not be
sufficient to pay amounts due on the Debt Securities of such series at the
time of the acceleration resulting from such Event of Default. However, the
Company shall remain liable for such payments.
The Applicable Prospectus Supplement will state if any defeasance provision
will apply to the Offered Debt Securities.
CONCERNING THE TRUSTEE
The Bank of New York, a New York banking corporation, is the Trustee under
the Indenture and is also trustee under several other indentures with the
Company. The Company maintains banking and other business relationships in the
ordinary course of business with The Bank of New York. Pursuant to the
provisions of the Trust Indenture Act, upon the occurrence of certain events,
The Bank of New York may be deemed to have a conflicting interest, by virtue
of its acting as the Trustee under the Indenture, the several other indentures
and its other business relationships with the Company, thereby requiring it to
resign and be replaced by a successor trustee under any or all of the
Indenture or the several other indentures.
The Trustee may resign at any time or may be removed by the holders of at
least a majority in aggregate principal amount of the Outstanding Debt
Securities. If the Trustee resigns, is removed or becomes incapable of acting
as Trustee or if a vacancy occurs in the office of the Trustee for any cause,
a successor Trustee shall be appointed in accordance with the provisions of
the Indenture.
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<PAGE>
PLAN OF DISTRIBUTION
Any of the Debt Securities being offered hereby may be sold in any one or
more of the following ways from time to time: (i) through agents; (ii) to or
through underwriters; (iii) through dealers; and (iv) directly by the Company
to purchasers.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
Offers to purchase Debt Securities may be solicited by agents designated by
the Company from time to time. Any such agent involved in the offer or sale of
the Debt Securities in respect of which this Prospectus is delivered will be
named, and any commissions payable by the Company to such agent will be set
forth, in the Applicable Prospectus Supplement. Unless otherwise indicated in
such Prospectus Supplement, any such agent will be acting on a reasonable best
efforts basis for the period of its appointment. Any such agent may be deemed
to be an underwriter, as that term is defined in the Securities Act, of the
Debt Securities so offered and sold.
If Debt Securities are sold by means of an underwritten offering, the
Company will execute an underwriting agreement with an underwriter or
underwriters at the time an agreement for such sale is reached, and the names
of the specific managing underwriter or underwriters, as well as any other
underwriters, the respective amounts underwritten and the terms of the
transaction, including commissions, discounts and any other compensation of
the underwriters and dealers, if any, will be set forth in the Applicable
Prospectus Supplement which will be used by the underwriters to make resales
of the Debt Securities in respect of which this Prospectus is being delivered
to the public. If underwriters are utilized in the sale of any Debt Securities
in respect of which this Prospectus is being delivered, such Debt Securities
will be acquired by the underwriters for their own account and may be resold
from time to time in one or more transactions, including negotiated
transactions, at fixed public offering prices or at varying prices determined
by the underwriters at the time of sale. Debt Securities may be offered to the
public either through underwriting syndicates represented by managing
underwriters or directly by one or more underwriters. If any underwriter or
underwriters are utilized in the sale of Debt Securities, unless otherwise
indicated in the Applicable Prospectus Supplement, the underwriting agreement
will provide that the obligations of the underwriters are subject to certain
conditions precedent and that the underwriters with respect to a sale of such
Debt Securities will be obligated to purchase all such Debt Securities if any
are purchased.
If a dealer is utilized in the sale of the Debt Securities in respect of
which this Prospectus is delivered, the Company will sell such Debt Securities
to the dealer as principal. The dealer may then resell such Debt Securities to
the public at varying prices to be determined by such dealer at the time of
resale. Any such dealer may be deemed to be an underwriter, as such term is
defined in the Securities Act, of the Debt Securities so offered and sold. The
name of the dealer and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
Offers to purchase Debt Securities may be solicited directly by the Company
and the sale thereof may be made by the Company directly to institutional
investors or others, who may be deemed to be underwriters within the meaning
of the Securities Act with respect to any resale thereof. The terms of any
such sales will be described in the Prospectus Supplement relating thereto.
If so indicated in the Applicable Prospectus Supplement, the Company may
authorize agents and underwriters to solicit offers by certain institutions to
purchase Debt Securities from the Company at the public offering price set
forth in the Applicable Prospectus Supplement pursuant to delayed delivery
contracts providing for payment and delivery on the date or dates stated in
the Applicable Prospectus Supplement. Such delayed delivery contracts will be
subject to only those conditions set forth in the Applicable Prospectus
Supplement. A commission indicated in the Applicable Prospectus Supplement
will be paid to underwriters and agents soliciting purchases of Debt
Securities pursuant to delayed delivery contracts accepted by the Company.
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<PAGE>
Agents, underwriters and dealers may be entitled under relevant agreements
with the Company to indemnification by the Company against certain
liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which such agents, underwriters and
dealers may be required to make in respect thereof.
Each series of Debt Securities will be a new issue and will have no
established trading market. The Company may elect to list any series of Debt
Securities on an exchange but, unless otherwise specified in the Applicable
Prospectus Supplement, the Company shall not be obligated to do so. No
assurance can be given as to the liquidity of the trading market for any of
the Debt Securities.
Agents, underwriters and dealers may be customers of, engage in transactions
with, or perform services for, the Company and its subsidiaries in the
ordinary course of business.
LEGAL OPINIONS
Unless otherwise specified in a Prospectus Supplement relating to particular
Debt Securities, the validity of the Debt Securities offered hereby, will be
passed upon for the Company by Shearman & Sterling, New York, New York. The
validity of the Debt Securities offered hereby will be passed upon for the
underwriters, dealers or agents, if any, by counsel to be named in the
Applicable Prospectus Supplement.
EXPERTS
The financial statements and schedule incorporated in this Prospectus by
reference to the 1997 Form 10-K have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated in this Prospectus by reference in reliance upon
the authority of said firm as experts in giving said reports.
The consolidated financial statements of the Company included in any
subsequent Annual Report of the Company on Form 10-K and incorporated by
reference in this Prospectus will have been examined by the independent public
accountants whose report thereon appears in such Annual Report. Such
consolidated financial statements of the Company shall be deemed to be
incorporated herein from the date of filing of the applicable report on Form-
10K in reliance on the reports of such independent public accountants, given
on the authority of such firm as experts in auditing and accounting.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFOR-
MATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUPPLE-
MENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTA-
TION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY
UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIR-
CUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
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TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Cautionary Statement Concerning Forward-Looking Statements................. S-2
The Company................................................................ S-2
Recent Developments........................................................ S-3
Use of Proceeds............................................................ S-5
Capitalization............................................................. S-5
Ratio of Earnings to Fixed Charges......................................... S-6
Asbestos Litigation........................................................ S-6
Description of the Debentures.............................................. S-6
Underwriting............................................................... S-8
Notice to Canadian Residents............................................... S-9
Validity of the Debentures................................................. S-10
PROSPECTUS
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 3
The Company................................................................ 4
Use of Proceeds............................................................ 4
Description of Debt Securities............................................. 4
Plan of Distribution....................................................... 12
Legal Opinions............................................................. 13
Experts.................................................................... 13
</TABLE>
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[LOGO OF OWENS CORNING]
OWENS CORNING
$400,000,000
7 1/2% Debentures due 2018
PROSPECTUS SUPPLEMENT
CREDIT SUISSE FIRST BOSTON
BNY CAPITAL MARKETS, INC.
MERRILL LYNCH & CO.
RBC DOMINION SECURITIES CORPORATION
SCOTIA CAPITAL MARKETS
SG COWEN
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