Williams Adds to Credit Facility

TULSA, Okla. -- Williams Communications (NYSE:WCG - news), a leading provider of broadband services for bandwidth-centric customers, today announced the successful closing of a $450 million add-on to its senior secured credit facilities. This add-on facility was funded by the investment group of Salomon Smith Barney, Lehman Brothers, Merrill Lynch, JP Morgan Chase, and Bank of America.

Since the beginning of the year, Williams Communications has raised additional liquidity of approximately $2.4 billion, significantly improving the company's funding and liquidity position. These funds have been raised through the private placement of debt instruments, capital restructuring, and the sale of non-core company assets.

"We have undertaken several strategic steps this year to strengthen our financial position," said Scott Schubert, CFO of Williams Communications. "Upsizing our bank credit facility is one more important step in positioning Williams Communications to fully fund our business plan," said Schubert.

Williams Communications Group
gladysnight 12/4/2012 | 8:30:42 PM
re: Williams Adds to Credit Facility Seems strange to me that a company like Williams, with approximately 1B total annual revenues, should need such a massive cash funding.

Compare it with LU, a company with 30 times the gross revenue, which merits (apparently) severe criticism for securing a 6.5B facility.

Either Williams actions or the criticism of LU are disproportionate, imo.
gladysnight 12/4/2012 | 8:30:38 PM
re: Williams Adds to Credit Facility drone,

Agreed. But basically they're both still just businesses, with no particular right to their customers money. They both still have to compete for customers, and manage their businesses the best they can.

Williams has no more guarantee of income in return for its borrowings than LU does.

just an idle thought really, that it seemed a big imbalance. Imagine any established company that borrowed an entire years revenue!

Sounds a lot like Amazon, I suppose . . .
drone387 12/4/2012 | 8:30:38 PM
re: Williams Adds to Credit Facility Williams is a carrier and Lucent is an equipment vendor. [Apples & Oranges] Carriers need billions upfront to set up networks before the money starts flowing in from them. This is your basic traditional utility. Equipment vendors are supposed to finance R&D, etc. out of gross profits. Lucent borrowed heavily to finance the carriers, rapid expansion, ... It got caught in a classic jam: borrowing cheap short term money and lending it out long. When the Fed was cutting interest rates, Lucent was able to repackage carrier debt and sell it off. The Fed cranked up the interest rate, the bubble bursts, money becomes scarce and expensive, and Lucent is caught holding the bag. Thus, Williams uses it's credit facility on revenue generating capital expenditures and Lucent uses it's credit facility to retire bad debt and expenses. Williams grows stronger and Lucent fights for it's life.
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