On March 21, 2018, McDermott International, Inc., a Panamanian corporation
(McDermott), issued a press release announcing that, subject to market and other conditions, McDermott Technology (US), Inc. and McDermott Technology (Americas), Inc. (together, the Post-Merger
Co-Issuers),
each a wholly owned subsidiary of McDermott, intend to jointly offer for sale $950 million in aggregate principal amount of senior unsecured notes due 2024 and $550 million in
aggregate principal amount of senior unsecured notes due 2026 (collectively, the notes) in a private offering to eligible purchasers that is exempt from registration under the Securities Act of 1933, as amended (the Securities
Act). The notes are expected to be sold to qualified institutional buyers in reliance on Rule 144A under the Securities Act and to persons outside the United States in reliance on Regulation S under the Securities Act.
The notes will be initially issued by McDermott Escrow 1, Inc. and McDermott Escrow 2, Inc. (together, the Escrow Issuers), each of which is a
special purpose entity incorporated under the laws of the State of Delaware and is wholly owned by Stichting Hydra Notes, a foundation organized under the laws of the Netherlands.
The proceeds of the offering will be deposited into a segregated escrow account until the date on which certain escrow conditions are satisfied and the escrow
proceeds are released (the Escrow Conditions). Concurrent with the satisfaction of the Escrow Conditions, the Escrow Issuers will merge with and into the Post-Merger
Co-Issuers,
with each
Post-Merger
Co-Issuer
being a surviving entity that will assume, by operation of law, the obligations of the applicable Escrow Issuer under the notes and the indenture governing the notes.
Upon the consummation of the business combination (the Combination) between McDermott and Chicago Bridge & Iron Company N.V.
(CB&I), the notes will be jointly and severally guaranteed on a senior unsecured basis by McDermott, each of McDermotts and CB&Is material restricted subsidiaries (other than the Post-Merger
Co-Issuers)
that guarantees indebtedness of either Post-Merger
Co-Issuer
or any guarantor under McDermotts credit agreement.
Upon satisfaction of the Escrow Conditions, McDermott intends to use the net proceeds from the offering of the notes to pay a portion of the purchase price
for the pending acquisition of the technology operations of CB&I in connection with the Combination.
A copy of the press release referred to above is
included as Exhibit 99.1 to this Current Report on Form
8-K
and is incorporated herein by reference.
This Current
Report on Form
8-K
does not constitute an offer to sell, the solicitation of an offer to buy, an offer to purchase or a solicitation of an offer to sell any securities, including the notes, nor shall it
constitute such an offer or solicitation in any jurisdiction in which such offer, solicitation, sale or purchase is unlawful.
All statements other than
statements of historical fact included in this Current Report on Form
8-K
are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements
in this Form
8-K
include, among other things, statements about the offering of the notes, satisfaction of the Escrow Conditions relating to and release of the escrowed proceeds from the offering, the mergers
between the Escrow Issuers and the Post-Merger
Co-Issuers
and the use of proceeds from the offering. Although McDermott believes that the expectations reflected in those forward-looking statements are
reasonable, McDermott 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 various uncertainties. Factors which could cause actual results
to differ from those expectations include, but are not limited to, McDermotts ability to consummate the offering of the notes and any additional factors identified in McDermotts filings with the Securities and Exchange Commission,
including those in its Annual Report on Form
10-K
for the year ended December 31, 2017 under the heading entitled Risk Factors. This Current Report on Form
8-K
reflects expectations 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.