Williams Prices $1.5 Billion of Senior Notes

Rhea-AI Summary

Williams (NYSE: WMB) has successfully priced a public offering of $1.5 billion in Senior Notes, comprising three tranches: $450 million of 4.800% notes due 2029, $300 million of 5.150% notes due 2034, and $750 million of 5.800% notes due 2054. The 2034 notes are an additional issuance, bringing the total outstanding to $1.3 billion. The offering is expected to settle on August 13, 2024.

The company plans to use the net proceeds to repay commercial paper, fund capital expenditures, and for general corporate purposes, including potential repayment of near-term debt maturities. BofA Securities, PNC Capital Markets, RBC Capital Markets, and SMBC Nikko Securities America are acting as joint book-running managers for the offering.

Positive

• Successful pricing of $1.5 billion in Senior Notes
• Diverse maturity profile with notes due in 2029, 2034, and 2054
• Proceeds to be used for debt repayment and capital expenditures

Negative

• Increase in long-term debt obligations

Insights

Financial Analyst

Williams' $1.5 billion senior notes offering is a significant move that strengthens its financial position. The company is leveraging the current interest rate environment to secure long-term funding at relatively attractive rates, ranging from 4.800% to 5.800%. This strategy allows Williams to refinance short-term debt and fund capital expenditures, potentially improving its debt maturity profile and reducing interest rate risk.

The offering's success indicates strong investor confidence in Williams' creditworthiness. The slight discount to par value suggests a balance between attracting investors and minimizing the company's cost of capital. The additional issuance of 2034 notes, increasing the total to $1.3 billion, may enhance liquidity for these securities in the secondary market.

Energy Sector Analyst

This debt offering by Williams, a major player in the natural gas infrastructure sector, signals confidence in the company's long-term growth prospects. The allocation of funds towards capital expenditures suggests ongoing investment in infrastructure projects, which is important for maintaining and expanding Williams' market position in the midstream energy sector.

The varied maturity dates (2029, 2034 and 2054) indicate a strategic approach to debt management, spreading out repayment obligations. This could provide Williams with financial flexibility to navigate potential industry volatility. The company's ability to secure long-term financing amidst the energy transition underscores investor faith in natural gas's role in the future energy mix.

TULSA, Okla.--(BUSINESS WIRE)-- Williams (NYSE: WMB) announced today that it has priced a public offering of $450 million of its 4.800% Senior Notes due 2029 at a price of 99.810 percent of par, $300 million of its 5.150% Senior Notes due 2034 at a price of 99.037 percent of par (the “new 2034 notes”), and $750 million of its 5.800% Senior Notes due 2054 at a price of 99.784 percent of par. The new 2034 notes are an additional issuance of Williams’ 5.150% Senior Notes due 2034 issued on January 5, 2024 and will trade interchangeably with the $1.0 billion aggregate principal amount of such notes outstanding, resulting in $1.3 billion aggregate principal amount of such notes outstanding. The expected settlement date for the offering is August 13, 2024, subject to the satisfaction of customary closing conditions.

Williams intends to use the net proceeds of the offering to repay its commercial paper, fund capital expenditures and for other general corporate purposes, which may include the repayment of its near-term debt maturities or other obligations.

BofA Securities, Inc., PNC Capital Markets LLC, RBC Capital Markets, LLC, and SMBC Nikko Securities America, Inc. are acting as joint book-running managers for the offering.

This news release is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

An automatic shelf registration statement relating to the notes was previously filed with the Securities and Exchange Commission (the “SEC”) and became effective upon filing. Before you invest, you should read the prospectus in the registration statement and other documents Williams has filed with the SEC for more complete information about Williams and the offering. A copy of the prospectus supplement and prospectus relating to the offering may be obtained on the SEC website at www.sec.gov or from any of the underwriters by contacting:

BofA Securities, Inc.
201 North Tyron Street
NC1-022-02-25
Charlotte, North Carolina 28255-0001
Attention: Prospectus Department
Email: dg.prospectus_requests@bofa.com

PNC Capital Markets LLC
300 Fifth Avenue 10th Floor
Pittsburgh, Pennsylvania 15222
Telephone: 1-855-881-0697
Email: pnccmprospectus@pnc.com

RBC Capital Markets, LLC
Brookfield Place
200 Vesey Street, 8th Floor
New York, New York 10281
Toll-Free Number: (866) 375-6829
Email: rbcnyfixedincomeprospectus@rbccm.com
Attention: Syndicate Operations

SMBC Nikko Securities America, Inc.
277 Park Avenue
New York, New York 10172
Attention: Debt Capital Markets
Toll Free: 1-888-868-6856
E-mail: prospectus@smbcnikko-si.com

About Williams

Williams (NYSE: WMB) is a trusted energy industry leader committed to safely, reliably, and responsibly meeting growing energy demand. We use our 33,000-mile pipeline infrastructure to move a third of the nation’s natural gas to where it's needed most, supplying the energy used to heat our homes, cook our food and generate low-carbon electricity. For over a century, we’ve been driven by a passion for doing things the right way. Today, our team of problem solvers is leading the charge into the clean energy future – by powering the global economy while delivering immediate emissions reductions within our natural gas network and investing in new energy technologies.

Portions of this document may constitute “forward-looking statements” as defined by federal law. Although Williams believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Any such statements are made in reliance on the “safe harbor” protections provided under the Private Securities Reform Act of 1995. Additional information about issues that could lead to material changes in performance is contained in Williams’ annual and quarterly reports filed with the SEC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240808455950/en/

MEDIA:

media@williams.com

(800) 945-8723

INVESTOR CONTACTS:

Danilo Juvane

(918) 573-5075

Caroline Sardella

(918) 230-9992

Source: Williams

FAQ

What is the total value of Senior Notes offered by Williams (WMB) in this public offering?

Williams (WMB) has priced a public offering of $1.5 billion in Senior Notes.

When is the expected settlement date for Williams' (WMB) $1.5 billion Senior Notes offering?

The expected settlement date for Williams' (WMB) $1.5 billion Senior Notes offering is August 13, 2024, subject to customary closing conditions.

How does Williams (WMB) plan to use the proceeds from the $1.5 billion Senior Notes offering?

Williams (WMB) intends to use the net proceeds to repay commercial paper, fund capital expenditures, and for other general corporate purposes, which may include repayment of near-term debt maturities or other obligations.

What are the interest rates and maturity dates for the Senior Notes issued by Williams (WMB)?

Williams (WMB) issued 4.800% Senior Notes due 2029, 5.150% Senior Notes due 2034, and 5.800% Senior Notes due 2054.