8-KMaterial AgreementsRegulation FDExhibits & Filings

WILLIAMS COMPANIES, INC. 8-K Report, Material Agreement (Dec 20, 2012)

Filed December 20, 2012For Securities:WMB

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.

Frequently Asked Questions

The primary purpose of the $850 million offering of 3.700% Senior Notes due 2023 is to fund Williams Companies, Inc.'s proposed investment in Access Midstream Partners, L.P.

If the investment in Access Midstream Partners, L.P. has not closed by May 15, 2013, Williams Companies, Inc. is required to redeem all of the Senior Notes issued in this offering at a redemption price of 101% of the aggregate principal amount, plus any accrued and unpaid interest.

The notes are senior unsecured obligations of Williams Companies, Inc., will pay interest semi-annually on January 15 and July 15, and rank equally with other senior indebtedness. They also include various redemption options for the company and a mandatory redemption clause tied to the completion of the Access Midstream Partners investment.

Yes, prior to the consummation of the Access Midstream Partners investment or a special mandatory redemption, the net proceeds from the notes offering can only be used for investments in certain cash equivalents or for the investment itself. They cannot be used for any other purpose.