By Paul Deckelman
New York, June 15 - Williams Partners LP priced a $150 million issue of five-year senior unsecured notes, high-yield syndicate sources said Thursday. The notes priced at par to yield 7½%, or a spread of 244 basis points over the comparable Treasury issue.
The quickly shopped deal - which was first announced Monday - was brought to market via joint book-running managers Citigroup and Lehman Brothers, along with co-managers Merrill Lynch, Wachovia Securities and BNP Paribas. It priced following the conclusion of a short roadshow that began Monday. The marketing process also included a conference call with prospective investors on Monday afternoon.
The Rule 144A and Regulation S issue is non-callable, except for a make-whole call at 75 bps over Treasuries.
The deal's proceeds will be used to help Williams Partners finance a planned asset purchase from its corporate parent, natural gas and pipeline operator The Williams Cos. Inc.
Williams Partners, formed in February 2005 and, like its parent, based in Tulsa, Okla., is buying a 25.1% stake in Williams Four Corners LLC, another Williams Cos. subsidiary, for $360 million. At closing, the partners will own natural gas gathering, processing and treating assets in the San Juan Basin in Colorado and New Mexico.
In addition to the bond deal, the company raised the rest of the funding needed for the acquisition via a separate, concurrently announced offering of 6.6 million common equity units representing limited partner interests, which priced on Wednesday via an underwriting syndicate led by Lehman Brothers and Citigroup, the joint bookrunners. A.G. Edwards & Sons, Inc., Merrill Lynch, Wachovia, RBC Capital Markets Corp. and Raymond James & Associates, Inc. acted as co-managers for the equity offering.
Williams Partners said that the equity units priced at $31.25 apiece, for proceeds of $206.25 million. Full exercise of a 990,000-unit 30-day greenshoe by the underwriters to cover over-allotments could boost the total proceeds of the equity unit offering by $30.937 million, to $237.187 million. Depending on the total eventual size of the equity offering, a portion of the debt deal proceeds may also go to general corporate purposes.
The new bonds are rated Ba3, with a stable outlook, by Moody's Investors Service, and carry a BB- rating, with a positive outlook, from Standard & Poors.
| Issuer: | Williams Partners LP
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| Amount: | $150 million
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| Security description: | Senior unsecured notes
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| Maturity: | June 15, 2011
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| Coupon: | 7½%
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| Price: | Par
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| Yield: | 7½%
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| Spread: | 244 basis points over Treasuries
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| Call: | Make-whole call at Treasuries plus 75 bps
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| Bookrunners: | Citigroup and Lehman Brothers
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| Co-managers: | Merrill Lynch, Wachovia Securities and BNP Paribas
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| Pricing date: | June 15
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| Settlement date: | June 20, flat
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| Ratings: | Moody's: Ba3
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| Standard & Poor's: BB+
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| Distribution: | Rule 144A and Regulation S
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