What is the main purpose of the Amendment No. 1 filed by Williams Partners L.P.?

The primary purpose of Amendment No. 1 is to obtain the consent of the lenders under the existing Credit Agreement to allow it to continue as the credit facility for Access Midstream Partners, L.P. (ACMP) after the anticipated merger between Williams Partners L.P. and ACMP. This secures the financing for the combined entity and allows for the termination of ACMP's existing credit agreement.

What is the significance of the 'Specified Acquisition' designation?

The designation of the merger as a 'Specified Acquisition' is significant because it triggers a specific financial covenant. It imposes a limit on the debt-to-EBITDA ratio for ACMP, restricting it to 5.50 to 1.00 at the end of the fiscal quarter following the merger and for the two subsequent fiscal quarters. This covenant is designed to ensure the combined entity manages its leverage prudently post-merger.

What happens to ACMP's existing liens and guarantees as a result of this amendment?

The amendment provides consent from the lenders for certain existing liens and guarantees of indebtedness of ACMP, which are being terminated in connection with the merger, to not constitute defaults or issues under the Credit Agreement going forward. Essentially, the lenders are agreeing to these terminations as part of the merger process.

How does this filing impact the financial reporting for Williams Companies, Inc. (WMB)?

This filing directly impacts the financial structure and reporting of Williams Companies, Inc. as it pertains to the planned merger of its subsidiary, Williams Partners L.P., with Access Midstream Partners, L.P. It confirms the continuation of the credit facility and introduces a key financial covenant (debt-to-EBITDA ratio) that will be important for investors to track in future financial statements of the combined entity.

WMB 8-K: Material Agreements

Summary

Williams Companies, Inc. (WMB) and its subsidiary Williams Partners L.P. (the Partnership) filed an 8-K on December 4, 2014, to report a material definitive agreement. Specifically, Amendment No. 1 to the Partnership's First Amended & Restated Credit Agreement was executed on December 1, 2014. This amendment is crucial as it provides lender consent for the credit facility to continue supporting Access Midstream Partners, L.P. (ACMP) following the anticipated merger between the Partnership and ACMP. The amendment also addresses certain existing liens and guarantees related to ACMP that will be terminated as part of the merger. From an investor's perspective, this filing signifies a critical step in the planned merger between Williams Partners L.P. and Access Midstream Partners, L.P. The amendment secures the necessary financing arrangements by ensuring the credit agreement remains in place for the combined entity post-merger. A key financial covenant stipulated in the amendment is a debt-to-EBITDA ratio cap of 5.50 to 1.00 for ACMP for a specified period following the merger, which investors should monitor as an indicator of financial health and leverage management.

Key Highlights

1Williams Partners L.P. (the Partnership) and its subsidiaries NWP and TGPL entered into an amendment to their Credit Agreement on December 1, 2014.
2The amendment requires lender consent for the credit facility to serve Access Midstream Partners, L.P. (ACMP) post-merger.
3This ensures continued financing for ACMP upon its merger with the Partnership.
4Lenders consented to the termination of certain existing ACMP liens and guarantees in connection with the merger.
5The merger is designated as a 'Specified Acquisition' under the Credit Agreement.
6A new financial covenant limits ACMP's debt-to-EBITDA ratio to 5.50 to 1.00 for the three fiscal quarters following the merger.
7Definitions within the Credit Agreement will be updated to reflect ACMP's partnership agreement and senior notes post-merger.

WILLIAMS COMPANIES, INC. 8-K Report, Material Agreement (Dec 4, 2014)

Summary

Key Highlights

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