Soon after announcing a 53 million share offering to fund its recent acquisition, Williams Companies Inc. (WMB) has declared pricing of $1.9 billion senior notes for the same.
The North American energy firm announced a two-part offering. The first part comprises a $1.25 billion offering of 10-year notes, priced at 99.738% of par and carrying an interest rate of 4.55%. The second offering of $650 million 30-year notes is priced at 99.773% of par and carries an interest of 5.75%. Williams Companies anticipates these offerings to close on Jun 24.
The company plans to use the net proceeds from the offering to fund a part of its recently announced $6 billion acquisition of the 50% general partner (GP) interest and 55.1 million limited partner (LP) units in Access Midstream Partners LP (ACMP).
On Jun 15, Williams Companies announced that it would increase the GP and LP interests in Access Midstream – a master limited partnership (MLP) engaged in the midstream business – to 100% and 50%, respectively, by the third quarter. Williams Companies also stated that it intends to merge the energy infrastructure provider, Williams Partners LP (WPZ) with Access Midstream.
Furthermore, Williams Companies mentioned that the benefits from the acquisition would be reflected in its third-quarter dividend, which is expected to increase 32.0% to 56 cents per share. Notably, the stock has gained nearly 24% since the acquisition.
Tulsa, OK-based Williams Companies is a premier energy infrastructure provider in North America. At present, Williams Companies carries a Zacks Rank #3 (Hold), which implies that it is expected to perform in line with the broader U.S. market in the next one to three months.
Meanwhile, one can consider a better-ranked player from the same industry such as Holly Energy Partners L.P (HEP) that sports a Zacks Rank #1 (Strong Buy).
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