Williams says $513 million 8 5/8% notes tendered by consent deadline

New York, Aug. 17 - Williams Cos. Inc. said it received tenders of $513 million principal amount of its 8 5/8% senior notes due 2010 by the expiration of the consent deadline, enough to allow it to amend the note indenture.

Williams said it will execute the amendment but it will not become operative until the tender is completed.

Holders may no longer withdraw their notes or consents.

Williams said on Aug. 5 it is tendering for any and all of its $800 million principal amount of 8 5/8% senior notes.

The Tulsa, Okla., natural gas exploration, production and transportation company said it is offering to purchase the notes to decrease its debt, reduce annual interest expense and reduce administrative costs associated with the notes.

The price to be paid in the tender will be set using a fixed-spread formula.

For each $1,000 principal amount of the notes, Williams will pay the present value of the redemption price on June 1, 2007 plus the present value of the interest that would accrue until June 1, 2007 discounted using a spread of 85 basis points over the yield to maturity of the 3 1/8% U.S. Treasury note due May 15, 2007. The price is expected to be fixed at 2 p.m. ET on Aug. 19.

Williams is also soliciting consents to amend the note indenture in order to eliminate substantially all the restrictive covenants and certain events of default.

The tender is subject to Williams receiving sufficient consents to amend the indenture.

The total on offer includes a $20.00 per $1,000 consent payment that will only be paid to holders who tender before 5 p.m. ET on Aug. 18.

The tender expires at 5 p.m. ET on Sept. 2.

Williams will also pay accrued interest up to but excluding the settlement date, expected to be Sept. 7.

Citigroup Global Markets Inc. is lead dealer manager and solicitation agent (800 558-3745). Banc of America Securities LLC, J.P. Morgan Securities Inc. and Lehman Brothers Inc. are the co-dealer managers and solicitation agents. Global Bondholder Services Corp. is the information agent (866 924-2200 or 212 430-3774).

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