Summary
Williams Companies, Inc. (WMB) has filed an 8-K report detailing significant financial and operational updates as of June 27, 2014. The company entered into an amendment to its credit agreement, which includes adjustments to covenants related to debt-to-EBITDA ratios and the treatment of certain master limited partnerships (MLPs). Notably, the amendment allows for higher debt-to-EBITDA thresholds under specific acquisition scenarios and introduces provisions for merging Williams Partners L.P. and Access Midstream Partners, L.P. (ACMP). Furthermore, WMB announced the completion of a substantial acquisition on July 1, 2014, purchasing a significant ownership stake in ACMP from GIP for approximately $5.995 billion in cash. This acquisition involves common units, convertible Class B units of ACMP, and a 50% interest in its general partner, Access Midstream Ventures, L.L.C. These events signal a period of strategic growth and potential integration for Williams Companies.
Key Highlights
- 1Williams Companies amended its First Amended & Restated Credit Agreement to modify financial covenants and MLP-related provisions.
- 2The amendment raises the maximum permitted debt-to-EBITDA ratio to 5.50:1.00 following acquisitions exceeding $50 million and for two subsequent quarters.
- 3A standard debt-to-EBITDA ratio of 4.75:1.00 remains in effect for other periods.
- 4The credit agreement amendment allows for the potential merger or combination of Williams Partners L.P. and Access Midstream Partners, L.P. (ACMP).
- 5Williams Companies completed the acquisition of a significant portion of ACMP's equity, including common and convertible Class B units, and a 50% interest in its general partner.
- 6The total cash consideration for the ACMP acquisition was approximately $5.995 billion.
- 7The company is required to file financial statements and pro forma information for the acquired business in a subsequent amendment.