Williams Paying 30% Interest Rate on Loan
Williams is paying 30% interest on a $900 million, 1-year loan from Lehman Brothers and Warren Buffett’s Berkshire Hathaway. Williams obtained the loan
earlier this month as part of its plan to increase liquidity. The company has also announced plans to sell $2 billion worth of assets to bolster its balance sheet.
Williams must keep $600 million of actual and projected liquidity on hand for the 1st half of the loan and $750 million in the 2nd half, it said in a filing with the
SEC. If Williams fails to meet those terms, it will be forced to sell assets gained from its purchase of Barrett Resources within 75 days. Williams put up
collateral, including its Williams Production RMT exploration unit, as security for the $900 million loan. A group of financial institutions issued an additional
$1.1 billion in loans in the form of a $700 million revolver and $400 million line of credit. Williams used the new credit to repay $350 million of 6.2% and $300
million of floating-rate notes. Shares of Williams gained $0.02 to $2.82 on the NYSE yesterday.
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