New York, Oct. 22- Williams Cos. Inc. (B3/B+) said that it has set the consideration which it will offer to the holders of some $241 million of debentures issued by Williams and by Transco Energy Co. (B1) and Series B Medium Term Notes due 2003-2022, issued by MAPCO, Inc. (B3), under its previously announced tender offers and related consent solicitations for those securities. The Transco debentures and MAPCO notes were later assumed by Williams when it acquired those companies.
The prices for the various issues were set based on a formula using a fixed spread over the yield to maturity of the various respective reference securities as of 2 p.m. ET on Oct. 22, the pricing date (see table 1).
Holders who tendered before the now-expired 5 p.m. ET Oct. 20 consent deadline (thus, consenting to the proposed indenture changes) are to receive a $30 per $1,000 principal amount consent payment as part of their total consideration, while holders tendering after the consent deadline will receive the tender consideration, but not the consent payment.
Payment for all of the notes accepted in these tender offers is expected to occur on Nov. 10, and will include accrued and unpaid interest up to but not including the settlement date.
As previously announced, Williams, a Tulsa, Okla.-based energy company, said on Oct. 8 that it had begun a cash tender offer for any and all of the $1.4 billion outstanding principal amount of its 9 ¼% notes due 2004, and separately, but concurrently announced that it was also tendering for the $241 million principal amount of various other securities.
The various other securities being tendered for included about $27 million of the Transco 9 7/8% debentures due 2020; $108 million in three series of debentures, due 2012-2021, issued by Williams under a 1990 indenture (Williams' $37.012 million of 8 7/8% debentures due 2012; its $24.875 million of 10 ¼% debentures due 2010; and its $46.4 million of 9 3/8% debentures due 2021.); and $106 million of various tranches of MAPCO Series B Medium Term Notes due 2003-2022.
Williams set 5 p.m. ET on Oct 20 as the now-achieved early tender deadline in its tender for its 9¼% notes, and as the now-expired consent deadline in the tender offers for the various other securities (Williams said that it was seeking consent of the holders of those securities to proposed indenture changes that would eliminate certain restrictive covenants and events of default.)
It said it would set the prices it would pay for the various securities other than the 9 ¼% notes at 2 p.m. ET on Oct. 22, and set 5 p.m. ET on Nov. 6 as the expiration deadline for all of the tender offers, and said the final settlement date for all of the tenders would likely be on Nov. 10. All deadlines are subject to possible extension.
Williams said that it would pay holders of the 9¼% notes tendering their notes by the early tender deadline $1,025.50 per $1,000 principal amount of notes tendered, which would include a $30 per $1,000 early tender premium, and said those tendering noteholders would receive their consideration on the early settlement date, expected to be two business days after the early tender deadline. It said that 9¼% noteholders tendering after the early tender deadline would receive tender offer consideration of $995.50 per $1,000 principal amount for their notes on the final settlement date. All tendering noteholders will additionally receive accrued and unpaid interest up to, but not including, the appropriate settlement date.
The company said that it would determine the prices it would pay for the various other notes it is tendering for based on a formula using a fixed spread over the yield to maturity of the various respective reference securities as of 2 p.m. ET on Oct. 22, the pricing date. Holders tendering before the consent deadline (and thus, consenting to the proposed indenture changes) would receive a $30 per $1,000 principal amount consent payment as part of their consideration, while holders tendering after the consent deadline would not. All tendering holders will also receive accrued and unpaid interest up to, but not including, the final settlement date.
Williams said that tenders of the 9¼% notes made prior to the early tender deadline could not be withdrawn, unless Williams were to reduce the tender offer consideration or the early tender payment or be otherwise required by law to permit withdrawal.
It said that tenders of the various other securities made prior to the consent deadline could be withdrawn at any time before the consent deadline, but not afterward, unless Williams were to reduce the tender offer consideration or the consent payment or be otherwise required by law to permit withdrawal. Tenders of the various other securities made after the consent deadline could be properly withdrawn at any time until the offer expiration.
On Oct. 21, Williams said that the early tender date for its 9 ¼% notes occurred at 5 p.m. ET on Oct. 20, and said that it had accepted for purchase about $720 million aggregate principal amount of the notes, representing around 51% of the percent of the principal amount outstanding of the notes. Williams paid the previously announced total consideration for the early-tendered notes, including the $30 per $1,000 principal amount early tender payment. Total consideration paid by the company for those early-tendered notes was approximately $739 million.
Williams separately but concurrently announced that the consent date in connection the tender offers and related consent solicitations for the $241 million of various outstanding notes other than the 9¼% notes also occurred at 5 p.m. ET on Oct. 20, and said that as of that deadline, it had received tenders of notes and deliveries of related consents from holders of about $100 million aggregate principal amount of three series of its own debentures issued under the 1990 indenture; $24 million of the Transco 9 7/8% debentures and about $103 million aggregate principal amount of the various tranches of MAPCO medium-term notes.
Williams said that the supplemental indentures relating to each of the series of notes had been executed by Williams and the respective trustees, but will not become operative until after the notes are accepted for purchase and payment under the terms of the tender offers.
The tender offers for those securities, and for the 9¼% notes, are still set to expire as previously announced on Nov. 6. It said that tenders of any of the various other notes made prior to 5 p.m. ET on Oct. 20 may no longer be withdrawn.
Williams said it was tendering for the 9¼% notes and for the various other securities in order to decrease its debt and annual interest expense, and said it would use available cash to fund the purchase of any notes accepted under the tender offer.
It said that the tender offers would be conditioned upon general tender offer conditions described in the official offers to purchase, and said that none of the tender offers would be conditioned upon the completion of the others. The tender offers for the various other securities (for which Williams is also seeking noteholder consents) would not be conditioned upon the company receiving the minimum required consents to amend the respective indentures.
Lehman Brothers Inc. will serve as the lead dealer manager (call 212 528-7581 or 800 438-3242). Banc of America Securities LLC, Citigroup Global Markets Inc. and J. P. Morgan Securities Inc. will serve as co-dealer managers, and D.F. King & Co. Inc. will serve as the information agent for the tender offers (call 212 269-5550 or 800 431-9643).
Table 1: Prices in Williams Cos. tender offer
| Security | Reference Security | Reference Yield | Fixed Spread | Total price
|
|
|
| Transco Notes
|
| 9.875% due 2020 | 5.375% due Feb. 15, 2031 | 5.14% | 210 bps | $1,252.02
|
|
|
| MAPCO Notes
|
| 8.85% due 2003 | T-Bill due Nov. 13, 2003 | 0.91% | 0 bps | $1,000.44
|
| 8.87% due 2004 | 3.625% due March 31, 2004 | 1.07% | 50 bps | $1,026.01
|
| 8.85% due 2004 | 3.625% due March 31, 2004 | 1.07% | 50 bps | $1,028.14
|
| 8.78% due 2004 | 2.000% due Nov. 30, 2004 | 1.33% | 87.5 bps | $1,066.09
|
| 8.60% due 2005 | 1.5000% due Feb. 28, 2005 | 1.42% | 110 bps | $1,078.29
|
| 8.70% due 2005 | 1.5000% due July 31, 2005 | 1.42% | 125 bps | $1,101.03
|
| 8.20% due 2006 | 7.000% due July 15, 2006 | 2.20% | 150 bps | $1,114.88
|
| 8.45% due 2007 | 6.250% due Feb. 15, 2007 | 2.47% | 160 bps | $1,133.19
|
| 8.25% due 2007 | 4.375% due May 15, 2007 | 2.61% | 170 bps | $1,133.65
|
| 8.25% due 2007 | 4.375% due May 15, 2007 | 2.61% | 170 bps | $1,133.65
|
| 8.43% due 2008 | 3.250% due Aug. 15, 2008 | 3.14% | 180 bps | $1,145.52
|
| 8.55% due 2011 | 4.250% due Aug. 15, 2013 | 4.26% | 170 bps | $1,158.52
|
| 8.63% due 2013 | 4.250% due Aug. 15, 2013 | 4.26% | 200 bps | $1,170.72
|
| 8.48% due 2013 | 4.250% due Aug. 15, 2013 | 4.26% | 200 bps | $1,160.05
|
| 8.40% due 2014 | 4.250% due Aug. 15, 2013 | 4.26% | 210 bps | $1,156.99
|
| 8.80% due 2022 | 5.375% due Feb. 15, 2031 | 5.14% | 210 bps | $1,158.58
|
| 8.70% due 2022 | 5.375% due Feb. 15, 2031 | 5.14% | 210 bps | $1,148.82
|
| 8.72% due 2022 | 5.375% due Feb. 15, 2031 | 5.14% | 210 bps | $1,150.52
|
|
|
| Williams Notes
|
| 8.875% due 2012 | 4.25% due Aug. 15, 2013 | 4.26% | 190 bps | $1,182.93
|
| 10.25% due 2020 | 5.375% due Feb. 15, 2031 | 5.14% | 210 bps | $1,288.59
|
| 9.375% due 2021 | 5.375% due Feb. 15, 2031 | 5.14% | 210 bps | $1,212.97
|
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