S&P revises Williams outlook to positive

S&P said it revised its outlook for Williams Cos. Inc. (WMB) to positive from stable and affirmed all its ratings, including the BBB issuer rating as well as the BBB issuer credit ratings on its operating subsidiaries Transcontinental Gas Pipe Line Co. LLC (Transco), Northwest Pipeline LLC, and MountainWest Pipeline LLC.

“The outlook revision reflects WMB's solid credit metrics. The company ended fiscal year 2023 with S&P Global Ratings-adjusted EBITDA of about $6.6 billion and leverage of about 4x. We forecast WMB will generate S&P Global Ratings-adjusted EBITDA of about $6.8 billion-$7 billion in 2024. We anticipate the expansion in its EBITDA will mainly stem from its selection of stable, fee-based, take-or-pay arrangements and similar type contracts, as well as increased volumes across its assets,” S&P said in a press release.

The agency said it also anticipates WMB will keep focusing on expansion projects at Transco due to the continued increase in liquefied natural gas exports. These projects are fully contracted and will provide the company with added cash flow over the long term.

“We expect WMB's S&P Global Ratings-adjusted debt to EBITDA will be in the low-4x range in 2024 before improving below 4x in 2025,” S&P said.

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