Williams Prices $1.25B Senior Notes Offering

Energy infrastructure company Williams (WMB) announced that it has priced a public offering of 2.60% senior notes due 2031 at 100.973% of par and 3.50% senior notes due 2051 at 99.833% of par. The company plans to settle the issuance of the notes by October 8, 2021.

WMB engages in building and providing infrastructure that safely processes and delivers natural gas products.  (See Williams stock charts on TipRanks)

Net proceeds from the offering are expected to be used for general corporate purposes, which may include, together with cash in hand, repaying the $1.25 billion aggregate principal amount of the company’s outstanding 3.60% Senior Notes due 2022.

Barclays Capital Inc., SMBC Nikko Securities America, Inc., Truist Securities, Inc. and Wells Fargo Securities, LLC acted as joint book-running managers for the offering.

On September 28, Bank of America Securities analyst Chase Mulvehill initiated a Buy rating on the stock with a price target of $31 (13.6% upside potential).

Last month, Morgan Stanley analyst Devin McDermott reiterated a Hold rating on Williams with a price target of $30 (10% upside potential).

McDermott said, “While balance sheet preservation, dividend growth, and organic project reinvestment (Transco, offshore GoM, energy transition) have been earmarked as higher capital allocation priorities, a future decision to use buybacks more frequently could receive greater investor credit if a track record is established.”

Consensus among analysts is a Strong Buy based on 6 Buys and 1 Hold. The average Williams price target stands at $29.29 and implies upside potential of 7.4%.

Furthermore, Williams scores a “Perfect 10” from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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