McDermott Announces Amendment to Senior Secured Credit Agreement and Addition of a Bilateral Letter of Credit Line
April 18 2016 - 10:21PM
McDermott International, Inc. (NYSE:MDR) today announced that it
has entered into an amendment to the Company’s Senior Secured
Credit Agreement (the “Amendment”). The Amendment includes
replacement of an existing minimum EBITDA requirement with a more
standard covenant package comprised of two leverage ratios and a
fixed charge ratio and removes or reduces certain reporting
requirements to the Credit Agreement lenders.
The Amendment is also expected to provide $450 million of letter
of credit capacity (with the potential to increase to $600 million
under an accordion feature), extend the maturity date of the letter
of credit facility under the Senior Secured Credit Agreement to
April 22, 2019 (or January 15, 2019 if the term loan remains
outstanding or is not refinanced by that date) and
provide increased flexibility by increasing the baskets for
purchase money indebtedness, acquisitions and purchases of junior
priority debt and extending the window to mortgage the DLV 2000 by
one year to allow the Company to consider potential financing
options. The Company will seek consents from the existing
term lenders on the extension, the basket increases and the
timing of the DLV 2000 mortgage.
Also, on April 13, 2016, McDermott entered into an unsecured and
uncommitted bilateral letter of credit arrangement for
approximately $100 million with a Middle East bank. This new
relationship is expected to support McDermott’s strong bidding
activity in the Middle East.
Stuart Spence, McDermott’s Executive Vice President and Chief
Financial Officer, said, “We are extremely pleased with the
Amendment to our Credit Agreement and the addition of the Middle
East bilateral line as it demonstrates the strong relationships
McDermott has with our banks and the confidence they have in our
company. The transition from a minimum EBITDA requirement to a more
standard covenant package demonstrates McDermott’s improved
operational and financial results and further validates the
completion of McDermott’s turnaround last year.”
About McDermott McDermott is a leading provider
of integrated engineering, procurement, construction and
installation (EPCI) services for upstream field developments
worldwide. The Company delivers fixed and floating production
facilities, pipelines and subsea systems from concept to
commissioning for complex Offshore and Subsea oil and gas projects
to help oil companies safely produce and transport hydrocarbons.
Our customers include national and major energy companies.
Operating in more than 20 countries across the world, our locally
focused and globally integrated resources include approximately
11,200 employees, a diversified fleet of specialty marine
construction vessels, fabrication facilities and engineering
offices. We are renowned for our extensive knowledge and
experience, technological advancements, performance records,
superior safety and commitment to deliver. McDermott has served the
energy industry since 1923. As used in this press release,
McDermott includes McDermott International, Inc. and its
subsidiaries and affiliates. To learn more, visit our website at
www.mcdermott.com.
Forward-Looking Statement In accordance with
the Safe Harbor provisions of the Private Securities Litigation
Reform Act of 1995, McDermott cautions that statements in this
press release which are forward looking, and provide other than
historical information, involve risks, contingencies and
uncertainties that may impact McDermott's actual results of
operations. These forward-looking statements include, among other
things, statements about McDermott’s improved operational and
financial results and turnaround and the energy economy. Although
we believe that the expectations reflected in those forward-looking
statements are reasonable, we can give no assurance that those
expectations will prove to have been correct. Those statements are
made by using various underlying assumptions and are subject to
numerous risks, contingencies and uncertainties, including, among
others: our inability to successfully execute on contracts in
backlog, changes in project design or schedules, the availability
of qualified personnel, changes in the terms, scope or timing of
contracts, contract cancellations, change orders and other
modifications and actions by our customers and business partners,
difficulties executing on the project and changes in industry
norms. If one or more of these risks materialize, or if underlying
assumptions prove incorrect, actual results may vary materially
from those expected. For a more complete discussion of these and
other risk factors, please see McDermott's annual and quarterly
filings with the Securities and Exchange Commission, including its
annual report on Form 10-K for the year ended December 31, 2015.
This press release reflects management's views as of the date
hereof. Except to the extent required by applicable law, McDermott
undertakes no obligation to update or revise any forward-looking
statement.
McDermott International, Inc.
Investor Relations
Kathy Murray
Vice President, Treasurer and Investor Relations
+1 281.870.5147
kamurray@mcdermott.com
Media Relations
Rick Goins
Director, Global Communications
+1 281.870.5932
rgoins@mcdermott.com
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