prefered wmb-pi
The WMB preferred is backed by 2007 bonds at face value $25, plus the dividend at $2.25 per year.
If WMB gets in such a bad state they can't pay bond interest, then the investment is probably a writeoff anyway. But successful asset sales that allow them to convert the preferred one for one in 2005 (if I remember right) could provide about $5 in dividends plus whatever the stock is worth (I would guess another $5 or more if the turnaround is successful).
In the meantime I sure sleep better not holding shares in a company with this much volatility. Who knows, the stock could climb a lot higher if the sector finally emerges from the cloud. Pipelines are still a pretty good business.
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED DECEMBER 27, 2001)
40,000,000 FELINE PACS(SM)
(INITIALLY CONSISTING OF 40,000,000 INCOME PACS(SM))
(WILLIAMS LOGO)
----------------------
The Williams Companies, Inc. is offering 40,000,000 FELINE PACS. The
FELINE
PACS initially will consist of units referred to as Income PACS, each with a
stated amount of $25. Each Income PACS will include a purchase contract
pursuant
to which you will agree to purchase from us for $25 on February 16, 2005 a
number of shares of our common stock equal to the settlement rate. If the
applicable market value of our common stock as of the settlement date is
less
than or equal to the appreciation cap price of $41.25, the settlement rate
will
be 1.0000 shares, which is the $25 stated amount of the FELINE PACS divided
by
the closing price of our common stock on the date of this prospectus
supplement.
If the applicable market value of our common stock as of the settlement date
is
greater than the appreciation cap price of $41.25, the settlement rate will
be
equal to 1.0000 shares multiplied by the quotient of the appreciation cap
price
of $41.25 divided by the applicable market value of our common stock as of
the
settlement date. Under each purchase contract we will make quarterly
contract
adjustment payments at the rate of 2.50% of the stated amount per year, as
described in this prospectus supplement. Each Income PACS also will include
$25
principal amount of our senior notes due February 16, 2007. The notes will
bear
interest at a rate of 6.50% per year, which rate is expected to be reset on
or
after November 16, 2004. The notes will not trade separately from the Income
PACS unless and until a permitted substitution is made. At any time after
the
issuance of the Income PACS, a holder may substitute U.S. Treasury
securities
for the notes, in accordance with the terms described in this prospectus
supplement. A FELINE PACS that consists of the purchase contract and a
substituted Treasury security is referred to as a "Growth PACS(SM)."
The Income PACS have been approved for listing on the New York Stock
Exchange, or NYSE, under the symbol "WMB PrI," subject to official notice of
issuance. On January 7, 2002, the last reported sale price of our common
stock
on the NYSE was $25.00 per share. |
