CHICAGO -- USG Corp. said it completed the exchange of $138.5 million of bank term loan and capitalized interest notes for new 10 1/4% senior notes due in 2002. The company said the exchange eliminates all scheduled bank amortization payments prior to Dec. 31, 1997, and provides USG with a mechanism to repay or purchase up to $165 million of its public senior debt due prior to Jan. 1, 1999.

Under terms of the exchange, USG Interiors also paid off all outstanding revolving credit facility capitalized interest notes for approximately $9 million in cash. As previously reported, the new 10 1/4% senior notes were offered to the bank group in exchange for up to $95 million of bank term loans and up to $47.4 million of capitalized interest notes.

USG said the exchange was completed with more than 97% acceptance by the bank syndicate.

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