8-KMaterial AgreementsFinancial EventsOther Events+1

WILLIAMS COMPANIES, INC. 8-K Report, Material Agreement (Feb 10, 2010)

Filed February 10, 2010For Securities:WMB

Summary

Williams Partners L.P. (the Partnership), a subsidiary of The Williams Companies, Inc. (WMB), announced the completion of a significant $3.5 billion private offering of senior notes on February 9, 2010. This offering consisted of three tranches: $750 million in 3.800% senior notes due 2015, $1.5 billion in 5.250% senior notes due 2020, and $1.25 billion in 6.300% senior notes due 2040. The notes are senior unsecured obligations of the Partnership. The primary use of the net proceeds from this offering is to fund the cash portion of a previously announced asset contribution transaction (the 'Dropdown') with the parent company, The Williams Companies, Inc. The filing also details the terms of the offering, including interest payment schedules, covenants restricting liens and mergers, and the conditions under which the Partnership can redeem the notes. A registration rights agreement is in place to allow for the exchange of these private notes for registered notes within a specified timeframe, with potential penalties for non-compliance.

Key Highlights

  • 1Williams Partners L.P. successfully completed a $3.5 billion private offering of senior notes.
  • 2The offering includes three series of notes with varying maturities: 2015, 2020, and 2040, carrying coupon rates of 3.800%, 5.250%, and 6.300% respectively.
  • 3Proceeds are earmarked to fund the cash component of an asset contribution from the parent, The Williams Companies, Inc. (WMB).
  • 4The notes are senior unsecured obligations of the Partnership, ranking equally with other senior indebtedness.
  • 5The Indenture includes covenants that restrict the Partnership's ability to incur liens and engage in mergers or asset dispositions.
  • 6A Registration Rights Agreement mandates the exchange of these private notes for registered notes within specified timeframes, with potential penalties for failure to comply.
  • 7The offering is exempt from SEC registration requirements under the Securities Act of 1933.

Frequently Asked Questions

The primary purpose of this $3.5 billion private offering of senior notes by Williams Partners L.P. is to provide the cash required for the asset contribution transaction (the 'Dropdown') with its parent company, The Williams Companies, Inc. (WMB).

The offering consists of three tranches: $750 million of 3.800% senior notes due 2015, $1.5 billion of 5.250% senior notes due 2020, and $1.25 billion of 6.300% senior notes due 2040. Interest is paid semi-annually.

The notes are senior unsecured obligations, meaning they rank equally with other senior indebtedness but are subordinated to secured debt. The Indenture contains covenants that restrict the Partnership's ability to incur liens and to merge or transfer assets, which are intended to protect noteholders. Additionally, a Registration Rights Agreement ensures that these privately placed notes will eventually be exchanged for registered notes, preventing liquidity issues for investors.

If the 'Dropdown' transaction is not consummated by April 15, 2010, the net proceeds from the offering will be used for a special mandatory redemption of the notes. This redemption would occur on or before May 5, 2010, at a price of 101% of the aggregate principal amount plus accrued interest.