Moody’s revises Williams view, review direction

Moody's Investors Service said it changed the outlook for Williams Partners, LP (WPZ) and its rated subsidiaries to negative from stable.

The review of Williams Cos., Inc.'s Baa3 senior unsecured ratings was changed to under review direction uncertain from under review for upgrade.

Moody's affirmed Williams Partners’ Baa2 senior unsecured ratings and Prime-2 short term rating, and the Baa1 ratings of wholly owned pipeline subsidiaries Northwest Pipeline GP and Transcontinental Gas Pipeline Co.

These ratings actions are in response to Williams' announcement that its board of directors authorized a process to explore a range of strategic alternatives following receipt of an offer to acquire Williams.

"The unsolicited proposal and strategic review raises uncertainty regarding the future direction of Williams Companies and its rated subsidiaries," Moody's senior vice president Pete Speer said in a news release.

"Williams and WPZ are already weakly positioned for their respective Baa3 and Baa2 ratings owing to their high financial leverage and the execution risk on growth projects. The pending merger of WPZ with Williams Cos. is a key part of the company's overall plan to significantly reduce its financial leverage and we see more risk in achieving that plan."

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