Fitch Ratings has assigned a 'BBB' rating to The Williams Companies, Inc.'s (WMB) proposed offering of senior unsecured notes.
The Rating Outlook for WMB is Positive. The proceeds will be used to repay debt and for general corporate purposes.
WMB's ratings reflect its fee-based contracts, extensive geography and low leverage. The Positive Outlook is based on operational improvements that will allow the company to better withstand future challenges.
Key Rating Drivers
Significant Leverage Decrease Likely: Fitch expects 2026 leverage below the 4.0x level, commensurate with a strong 'BBB' rating. Based on price relationships in the futures markets and elsewhere, Fitch expects WMB to materially benefit from a wave of new LNG facilities that should operate at high utilization factors at the beginning of 2026. The advent of these facilities would aid WMB's volumetric-risk systems and help with re-contracting certain take-or-pay assets. WMB's first capital allocation priority is to maintain financial strength on its balance sheet, but the company does not have a publicly articulated numerical leverage policy.
Execution Under Regulation: Almost half of WMB's EBITDA stems from natural gas pipelines regulated (with respect to rates and permits) by the U.S. FERC. Transmission presents the lowest business risk among the company's divisions. Fitch regards FERC as one of the most supportive bodies among the dozens of state and federal government regulators that oversee the electricity and other energy infrastructure industries. WMB has successfully executed under FERC regulation.
Stable Capex to Serve Customers: WMB's gathering customers implemented strategy changes several years ago that make it easier for the company to plan its growth. At the current phase of the cycle, WMB has been able to moderate its capex spending in its Northeast and West segments. However, the data center related project could temporarily elevate capex. Over the past few years, Williams has consistently reported positive FCF. While volume could decrease unexpectedly, WMB is diverse and financially strong enough to absorb downside.
Rating Linkage Between WMB, Subsidiaries: Fitch determines WMB's Standalone Credit Profile (SCP) based on consolidated metrics when applying Fitch's 'Parent and Subsidiary Rating Linkage Criteria.' Its subsidiaries Transcontinental Gas Pipeline Company, LLC, Northwest Pipeline LLC and MountainWest Pipeline, LLC each have a stronger SCP than the parent. The subsidiaries do not guarantee the debt of the parent. The lack of such guarantees and other linkage factors indicates a weak rating linkage. The ratings for these pipelines are limited to one notch above the parent.
Peer Analysis
A comparable company for WMB is Enbridge Inc. (ENB; BBB+/Stable). Both companies have, as one of their largest discrete assets, a high capacity, highly utilized natural gas pipeline serving the U.S. East Coast (Transco for WMB and Texas Eastern Transmission, LP for Enbridge).
ENB has lower business risk and more geographic and segmental diversity than WMB. Approximately 98% of ENB's expected cash flow will be from either regulatory rate orders or long-term take-or-pay contracts. For WMB, the calculation of the same metric would return a value of approximately 50%.
Fitch projects ENB's leverage in 2025-2026 to be about 5.2x. For WMB, Fitch expects 2026 leverage below 4.0x. WMB's EBITDA leverage in 2023-2024 was in the 4.1x-4.2x range.
Both companies are strongly positioned in their respective rating categories. ENB is rated one notch higher than WMB due to its lower business risk. WMB's Positive Outlook reflects Fitch's expectation of lower run-rate leverage than has been the case in the recent past.
Fitch's Key Rating-Case Assumptions
Fitch's Price Deck;
2025 EBITDA increases materially from 2024;
2025 growth capex is per management guidance;
Dividend growth at approximately the same percentage increase as the recent run rate;
The future rate case outcome for Transcontinental Gas Pipeline Company, LLC is approximately as supportive as previous outcomes;
Base interest rates forecast is in line with Fitch's Global Economic Outlook.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
EBITDA leverage forecast remaining above 4.8x on a sustained basis;
A large acquisition or a large investment project that significantly increases business risk.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
The 2025 EBITDA leverage forecast remains materially below 4.0x and run rate out-years below 4.0x, and management commentary continues to express credit quality as a top capital allocation priority.
Liquidity and Debt Structure
As of Sept. 30, 2025, WMB had $70 million of cash on hand and a $3.75 billion RCF that was undrawn. The company had $170 million outstanding under its $3.5 billion commercial paper program. Fitch expects WMB to have approximately $2.2 billion of consolidated debt coming due within one year. Fitch views WMB's current debt as manageable due to its RCF availability and refinancing capability.
Issuer Profile
The Williams Companies, Inc. is a natural-gas-focused midstream company with a large footprint in the U.S.
Summary of Financial Adjustments
With respect to unconsolidated affiliates, Fitch calculates midstream energy companies' EBITDA by the use of cash distributions from those affiliates rather than by the use of equity in earnings or ratable EBITDA of those affiliates. With respect to deferred revenue, Fitch removes this flow from EBITDA. Fitch removes from WMB EBITDA the net income attributable to noncontrolling interests.
Date of Relevant Committee
19 December 2025
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Click here to access Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in our credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on Fitch's ESG Relevance Scores, visit https://www.fitchratings.com/topics/esg/products#esg-relevance-scores.
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