Summary
Williams Companies, Inc. (WMB) filed an 8-K report on December 20, 2012, detailing the completion of an $850 million registered offering of 3.700% Senior Notes due 2023. These notes were issued in connection with the Company's proposed investment in Access Midstream Partners, L.P. The net proceeds from the offering are earmarked for this investment, with restrictions in place that will cease upon the consummation of the investment. The offering of senior unsecured notes carries semi-annual interest payments and is subject to certain redemption provisions. A significant condition is that if the Access Midstream Partners investment does not close by May 15, 2013, the Company must redeem the notes at a premium (101% of principal plus accrued interest). This structure highlights the company's strategic reliance on the successful completion of the Access Midstream Partners transaction to utilize the raised capital and avoid mandatory, potentially unfavorable, early redemption of the debt.
Key Highlights
- 1Completed an $850 million registered offering of 3.700% Senior Notes due 2023.
- 2Proceeds are designated for a specific investment in Access Midstream Partners, L.P.
- 3Notes are senior unsecured obligations, ranking equally with other senior indebtedness.
- 4Mandatory redemption at 101% of principal plus accrued interest if the Access Midstream Partners investment is not completed by May 15, 2013.
- 5Company has the option to redeem notes at a premium before May 15, 2013, if the investment is unlikely to be consummated.
- 6Standard "make-whole" redemption provisions apply prior to October 15, 2022.
- 7Notes may be redeemed at par on or after October 15, 2022.