USG seems to be edging away from the financial precipice. On Apr. 24, the building-products company offered bondholders a package of cash, bonds, and stock warrants that would reduce the company's debt to $1.65 billion from $2.6 billion. The offer would slash USG's debt-service costs by nearly 50% and free up cash to pay off $85 million in bank loans. Now, all USG Chairman Eugene Connolly Jr. has to do is persuade 95% of the bondholders to accept the deal. Then, he has to renegotiate bank financing and find a buyer for USG's DAP repair-products unit.

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