Williams Partners to sell $150 million five-year notes to help finance asset buy

By Paul Deckelman

New York, June 12 - Williams Partners LP plans to sell $150 million of five-year senior unsecured notes, to help finance a planned asset purchase from its corporate parent, The Williams Cos. Inc.

High-yield syndicate sources said Monday that the non-callable Rule 144A and Regulation S deal is expected to price Thursday morning following the conclusion of a short roadshow that began Monday. It was also marketed to prospective investors via a Monday afternoon conference call.

The deal is being brought to market via joint book-running managers Citigroup and Lehman Brothers, along with co-managers Merrill Lynch, Wachovia Securities and BNP Paribas.

Williams Partners on Monday concurrently announced an offering of 6.6 million common equity units representing limited partner interests, with a 30-day 990,000-unit greenshoe for the underwriters. The equity offering is expected to price on Wednesday. The proceeds of the two offerings will be used to fund the Williams Partners purchase, for $360 million, of a 25.1% stake in Williams Four Corners LLC, another subsidiary of Williams Cos., the Tulsa, Okla.-based natural gas and pipeline operator. Williams Four Corners has natural gas gathering, processing and treating operations in the San Juan Basin in New Mexico and Colorado. Depending on the outcome of the equity offering, a portion of the debt deal proceeds may also go to general corporate purposes.

Moody's Investors Service on Friday assigned Williams Partners a Ba3 corporate family rating as it initiated coverage of the Tulsa-based natural gas processor. Moody's also assigned the prospective five-year note deal a Ba3 senior unsecured rating and gave the company a speculative grade liquidity rating of SGL-3 with a stable outlook.

It said that Williams Partners, formed in February 2005, merits a higher rating than some similar companies to which Moody's has given B1 ratings. Due to "its close relationship with Williams Cos. the partnership has better ability to acquire midstream assets from Williams Cos.," Moody's said, while also noting Williams Partners' lower leverage and conservative financial policies.

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