By Jennifer Chiou
New York, Dec. 7 - Williams Cos., Inc. announced the close of its tender offers for eight series of its notes at midnight ET on Dec. 6. The offers began on Nov. 7.
The company said that it accepted for purchase $200,599,000 of the $526,149,000 of tenders for its $571,321,000 of 7.875% notes due 2021; $187,701,000 of the $492.35 million of tenders for its $526,573,000 of 7.5% debentures due 2031; $116,826,000 of the $306,452,000 of tenders for its $369.02 million of 7.75% notes due 2031; and $241,339,000 of the $633,143,000 of tenders for its $686,218,000 of 8.75% notes due 2032.
All of the accepted notes had an acceptance priority level of 1.
Notes with acceptance priority levels of 2 through 5, listed in order below, were not accepted. Williams tallied tenders for $4,254,000 of its $24,313,000 of 8.125% notes due 2012; $13,655,000 of its $31,655,000 of 7.625% notes due 2019; $1,525,000 of its $13,565,000 of 8.75% senior notes due 2020; and $20,000 of its $2.04 million of 7.7% debentures due 2027.
As originally reported at the early tender time, which was 5 p.m. ET on Nov. 21, holders had tendered $1,986,432,000, or 89.3%, of the $2,224,705,000 of outstanding notes.
At the end of the offer, the company said it had taken in early tenders for about $1.97 billion of the notes. It received subsequent tenders for $9 million of notes after the early deadline.
As reported, the total purchase price for the notes was capped at $1 billion.
For each series of notes, the total payment per $1,000 principal amount of notes was determined based on the present value of future payments on that series of notes discounted to the settlement date at a discount rate equal to the sum of the yield to maturity for the applicable reference security, calculated by the dealer managers based on the bid-side price at 2 p.m. ET on Nov. 21, plus the applicable fixed spread and minus accrued interest up to but excluding the settlement date. Pricing specifics are in the table below.
For each $1,000 of notes, the company paid a total price of $1,302.34 for the 7.875% notes, $1,289.85 for the 7.5% debentures, $1,309.47 for the 7.75% notes and $1,424.42 for the 8.75% notes.
The total price included an early tender payment of $30.00 per $1,000 principal amount of notes tendered by the early tender time and accepted for purchase.
All in all, the company accepted $746,465,000 of the roughly $1.96 billion of tenders for top-priority notes, representing a proration factor of 38.16%.
Williams was going to pay $1,020.94 for the 8.125% notes, $1,252.12 for the 7.625% notes, $1,331.83 for the 8.75% notes and $1,303.57 for the 7.7% debentures.
The company also paid accrued interest up to but excluding the settlement date, which was on Dec. 7.
The consummation of the tender offers was subject to a financing condition, among other conditions.
The 7.7% debentures due 2027 were originally issued by Mapco Inc., which was acquired by Williams in March 1998.
The lead dealer managers were Barclays Capital Inc. (800 438-3242 or 212 528-7581) and Citigroup Global Markets Inc. (800 558-3745 or 212 723-6106). The information agent was Global Bondholder Services Corp. (866 736-2200 or 212 430-3774).
Williams is a natural gas company based in Tulsa, Okla.
Williams tender pricing
| Notes | Fixed spread | Reference Treasury | Total payment
|
| 7.875% notes due 2021 | 215 bps | 2.125% due Aug. 15, 2021 | $1,302.34
|
| 7.5% debentures due 2031 | 220 bps | 3.75% due Aug. 15, 2041 | $1,289.85
|
| 7.75% notes due 2031 | 230 bps | 3.75% due Aug. 15, 2041 | $1,309.47
|
| 8.75% notes due 2032 | 240 bps | 3.75% due Aug. 15, 2041 | $1,424.42
|
| 8.125% notes due 2012 | 37.5 bps | 1.375% due March 15, 2012 | $1,020.94
|
| 7.625% notes due 2019 | 185 bps | 2.125% due Aug. 15, 2021 | $1,252.12
|
| 8.75% senior notes due 2020 | 200 bps | 2.125% due Aug. 15, 2021 | $1,331.83
|
| 7.7% debentures due 2027 | 195 bps | 3.75% due Aug. 15, 2041 | $1,303.57
|
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