Williams Cos. gets tenders for $1.1 billion of notes, amends offers

New York, May 20 - The Williams Cos. Inc. (B3/B+) said it received tenders of $1.169 billion total of various series of notes under its previously announced cash tender offers for up to $1.1 billion principal amount of the outstanding notes.

The notes were tendered by the early tender deadline for each series of 5 p.m. ET on May 19, which expired as scheduled without extension.

Williams - which was offering to purchase any and all of the $113.830 million outstanding principal amount of its 6 5/8% notes scheduled to come due on Nov. 15., as well as a total of up to $1 billion of notes from six other series of bonds - said that as of the early tender deadline, it had received tenders of $87.8 million of the 6 5/8% notes and a total of $1.079 billion from the other six series of the notes.

It announced that it had amended the terms of the offers for the other six series of notes, so that the company will tender for any and all of the roughly $1.23 billion of total outstanding principal amount of the other notes, eliminating the $1 billion cap and a 1-though-6 priority ranking order under which it would accept the notes for purchase. All other original terms of the tender offers remain in force.

The companies said that as of the early tender date, holders had tendered $369.821 million of Williams' $400 million outstanding 6.75% putable asset term securities.

They also had tendered $178.629 million of the $200 million outstanding 6¼% senior debentures due 2006, $180.527 million of the $205 million outstanding 6½% notes due 2006, $118.845 million of the $150 million outstanding 7.55% senior notes due 2007 originally issued by Barrett Resources Corp. and later assumed by Williams, and had submitted required consents to a previously outlined consent solicitation related to those notes, $146.231 million of the $175 million outstanding 6½% notes due 2008, and $85 million of the $100 million outstanding 7¼% notes due 2009.

Notes tendered by the early tender deadline and any related consents may no longer be withdrawn.

The underlying tender offer meantime continues and is scheduled to expire on June 8, subject to possible extension.

As previously announced, Williams Companies, a Tulsa, Okla.-based natural gas company, said on May 10 that along with its wholly owned subsidiary, Williams Production RMT Co., it was beginning cash tender offers for $1.1 billion principal amount of several specified series of outstanding notes.

Williams said the companies were offering to purchase the outstanding notes to decrease their debt, reduce their annual interest expense and reduce administrative costs associated with the various debt issues. Certain of the outstanding notes the companies announced tender offers for were originally issued by Barrett Resources Corp., Williams Holdings of Delaware Inc. and Mapco Inc., all either subsidiaries of Williams Cos. or companies previously acquired and then absorbed by Williams, which assumed the various debt issues at the time of the acquisition.

Williams said that it would purchase any and all of the $113.830 million outstanding of 6 5/8% notes due on Nov. 15. It offered to pay $989 per $1,000 principal amount of notes tendered plus a $30 per $1,000 principal amount early tender payment, for notes tendered by the early tender deadline, for total consideration of $1,019 per $1,000 principal amount.

The companies also offered to buy up to $1 billion of certain of their specified series of notes maturing in 2006 through 2009.

In addition to a $30 per $1,000 principal amount early tender payment for each series of notes, the companies said they would seek to buy up to $400 million of 6¾% putable asset term securities, which are putable or callable on Jan. 15, 2006, for $1,021.25 per $1,000 principal amount, up to $200 million of 6¼% senior debentures due 2006 for $1,013.75 per $1,000 principal amount, up to $205 million of 6½% notes due 2006 for $1,023.75 per $1,000 principal amount, up to $150 million of the 7.55% senior notes due 2007, which were originally issued by Barrett Resources Corp., for $1,050 per $1,000 principal amount.

Williams Production RMT meanwhile was also soliciting noteholder consents to proposed amendments to the indenture governing the notes that would eliminate or amend substantially all of the restrictive covenants and certain events of default. The tender offers are not conditioned upon receiving the minimum required consents to amend the indenture.

Also, in addition to a $30 per $1,000 principal amount early tender payment, the companies offered to buy up to $175 million of 6½% notes due 2008 for $1,020 per $1,000 principal amount and up to $100 million of 7¼% notes due 2009 for $1,046 per $1,000 principal amount.

Williams also offered to pay cash accrued interest up to, but not including, the settlement date, on all validly tendered notes accepted in the various tender offers.

Lehman Brothers Inc. is the lead dealer manager (212 528-7581 or 800 438-3242). Banc of America Securities LLC, Barclays Capital Inc., Greenwich Capital Markets Inc., J.P. Morgan Securities Inc., Merrill Lynch & Co. and Scotia Capital (USA) Inc. will serve as co-dealer managers.

D.F. King & Co. Inc. is the information agent for the tender offer (212 269-5550 or 800 848-2998).

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