Williams increases revolver size by $275 million

By Sara Rosenberg

New York, Aug. 5 - The Williams Cos. Inc. increased its revolving credit facility by $275 million to a total capacity of $1.275 billion.

"In order to assure that we continue to have adequate liquidity and because of our restructuring progress as well as our solid operating performance, additional credit under our revolving credit facility was available to us and we decided to take advantage of that," company officials said in a conference call Thursday.

With this revolver increase, total combined facilities are $1.8 billion, with $1.1 billion available for borrowing.

The company also outlined its financial strategy during the call, which included maintaining a cash/liquidity position of $1 billion, continuing to delever with the ultimate goal being to reach investment-grade ratios and using cash to, among other things, pay scheduled debt retirements and early debt reduction.

To facilitate in the delevering of the balance sheet, the company announced a tender offer Thursday for $800 million 8 5/8% senior notes due 2010 that will be financed through available cash and liquidity.

"This action will allow us to achieve our year-end goal of reducing debt to about $9 billion ahead of schedule," officials said in the call.

Williams reduced its debt during the second quarter by about $1.5 billion, including $1.17 billion through cash tender offers and $255 million through open market repurchases ahead of schedule. Total debt at the end of the second quarter was about $9.8 billion.

The Tulsa, Okla., natural gas company had available cash and cash equivalents of about $1.5 billion as of July 30.

"Williams' turnaround is on track," chairman, president and chief executive officer Steve Malcolm said in a company news release. "We are driving our progress by delivering on our restructuring program, taking strategic advantage of our cash position and realizing the strength of our core businesses.

"For example, we have consistently executed on our business plan over the past two years. We've done exactly what we said we would - complete our major asset sales, strengthen our liquidity, reduce debt, live within our means and simplify our business mix.

"Second, even after paying down another $1.5 billion of debt during the second quarter, we have launched a new tender offer for another $800 million in outstanding debt. Our stated goal is to reduce our total long-term debt to less than $8 billion by the end of 2005."

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