Williams gets tenders of $4.74 billion of nine notes series by consent date in offer for $3 billion

By Susanna Moon

Chicago, Feb. 2 - Williams Cos., Inc. said holders tendered $4.74 billion principal amount of nine series of notes as of the early tender deadline of 5 p.m. ET on Feb. 1.

The company began an offer to purchase up to $3 billion principal amount of the notes on Jan. 19.

Williams said that holders of a majority of the notes have approved the proposed amendments to the notes. As a result, the company has received the required consents to amend the notes and will execute the supplemental indentures, which will become effective on the purchase date.

The notes eligible for the offer and the purchase prices are noted in the table below. The prices listed include a $30 early tender premium for each $1,000 principal amount of notes tendered by 5 p.m. ET on Feb. 1.

As of the early tender date, investors had tendered $427,733,000 of the 7.125% notes due 2011, $601.41 million of the 8.125% notes due 2012, $657,013,000 of the 7.625% notes due 2019, $581,185,000 of the 8.75% senior notes due 2020, $97,945,000 of the 7.7% debentures due 2027, $686,091,000 of the 7.875% notes due 2021, $630,422,000 of the 7.5% debentures due 2031, $428,096,000 of the 7.75% notes due 2031 and $629,998,000 of the 8.75% notes due 2032.

The company will first purchase tendered notes with an acceptance priority level of one. It will then purchase a principal amount of tendered notes with an acceptance priority level of two equal to $3 billion minus the principal amount of priority-one notes accepted for purchase.

If the tender offer is oversubscribed, priority-two notes will be accepted on a pro rata basis.

Williams is also soliciting consents to modify the indentures governing the notes and will pay a consent fee of $2.50 per $1,000 principal amount to holders who tender, including to those whose notes are not accepted in the tender offer. This consent fee is included in the purchase prices listed in the table below.

The tender offer and consent solicitations will expire at midnight ET on Feb. 16.

Williams said it is making the offer as part of its strategic restructuring. The consummation of the tender offer is subject to conditions that include the closing of the asset contribution transaction with Williams Partners LP, the successful consummation of the Williams Partners private bond offering and establishment of its credit facility and the receipt of the needed consents in the consent solicitation.

The dealer managers and solicitation agents are Barclays Capital Inc. (212 528-7581 or 800 438-3242) and Citi (800 558-3745). The information agent is Global Bondholder Services Corp. (212 430-3774 or 866 736-2200).

Williams is a natural gas company based in Tulsa, Okla.

Williams tender offer

Notes Acceptance priority level Price

$477 million 7.125% notes due 2011 1 $1,095

$626 million 8.125% notes due 2012 1 $1,145

$700 million 7.625% notes due 2019 1 $1,200

$600 million 8.75% senior notes due 2020 1 $1,285

$100 million 7.7% debentures due 2027 1 $1,175

$750 million 7.875% notes due 2021 2 $1,230

$690 million 7.5% debentures due 2031 2 $1,155

$480 million 7.75% notes due 2031 2 $1,165

$850 million 8.75% notes due 2032 2 $1,270

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