|
Item 1.01
|
Entry into a Material Definitive Agreement.
|
Amendments to Credit Agreements
On December 1, 2019, McDermott International, Inc., a Panamanian corporation (“McDermott”), McDermott Technology (Americas), Inc. (“MTA”), McDermott Technology (US), Inc. (“MTUS”) and McDermott Technology, B.V. (“MTBV”), each a wholly owned subsidiary of McDermott, as co-borrowers, and various other subsidiaries, as guarantors (the “Guarantors”), entered into Amendment No. 2 (the “Credit Agreement Amendment”) to the Credit Agreement, dated May 10, 2018 (as amended, the “Credit Agreement”), by and among MTA, MTUS and MTBV, as co-borrowers, McDermott, as a guarantor, the Guarantors, a syndicate of lenders and letter of credit issuers, Barclays Bank PLC, as administrative agent for the term facility under the Credit Agreement, and Crédit Agricole Corporate and Investment Bank, as administrative agent for the other facilities under the Credit Agreement.
Also, on December 1, 2019, McDermott, as a guarantor, and MTA, MTUS and MTBV, as co-applicants, and the Guarantors, entered into Amendment No. 2 (the “LC Agreement Amendment”) to the Letter of Credit Agreement dated October 30, 2018 (as amended, the “Letter of Credit Agreement”), by and among McDermott, as guarantor, MTA, MTUS and MTBV, as co-applicants, and the Guarantors.
The Credit Agreement Amendment amends, among other things, the events of default to provide that, for so long as the Forbearance Agreement (as defined below) is in effect and the Senior Notes (as defined below) have not been accelerated, the failure to make the Interest Payment (as defined below) will not constitute an event of default.
Like the Credit Agreement Amendment, the LC Agreement Amendment amends the events of default to, among other things, provide that, for so long as the Forbearance Agreement is in effect and the Senior Notes have not been accelerated, the failure to make the Interest Payment will not constitute an event of default.
The foregoing descriptions of the Credit Agreement Amendment and the LC Agreement Amendment are qualified in their entirety by reference to the full text of the Credit Agreement Amendment and the LC Agreement Amendment, copies of which are filed hereto as Exhibits 10.1 and 10.2, respectively, to this report and are incorporated herein by reference.
Amendment to Superpriority Credit Agreement
On December 1, 2019, McDermott, as a guarantor, and MTA, MTUS and MTBV, as co-borrowers (collectively, the “Borrowers”) entered into Amendment No. 1 (the “Superpriority Amendment”) to the superpriority senior secured credit agreement, dated October 21, 2019 (as amended, the “Superpriority Credit Agreement”), with a syndicate of lenders and letter of credit issuers (collectively, the “Superpriority Lenders”), Barclays Bank PLC, as administrative agent for the Term Facility (as defined in the Superpriority Credit Agreement), and Crédit Agricole Corporate and Investment Bank, as administrative agent for the LC Facility (as defined in the Superpriority Credit Agreement).
The Superpriority Amendment amends the Superpriority Credit Agreement to, among other things:
|
(i)
|
waive certain conditions precedent to the Tranche B Funding Date (as defined in the Superpriority Credit Agreement) to facilitate the funding of the Tranche B Commitment (as defined in the Superpriority Credit Agreement);
|
|
(ii)
|
provide for the acknowledgement and consent by the Superpriority Lenders of the Borrowers’ compliance with the required Business Plan Milestones (as defined in the Superpriority Credit Agreement) which include, among other things, the movement from a four-week budget update to a two-week budget update on an ongoing basis; and
|
|
(iii)
|
modify the cross-default provision to provide that, for so long as the Forbearance Agreement is in effect and the Senior Notes have not been accelerated, the failure to make the Interest Payment will not constitute an event of default.
|
After giving effect to the Superpriority Amendment, McDermott will be granted access to $350 million of capital in connection with the funding of the second tranche under the Superpriority Credit Agreement.
The foregoing description of the Superpriority Amendment is qualified in its entirety by reference to the Superpriority Amendment, a copy of which is filed as Exhibit 10.3 to this report and is incorporated herein by reference.
Forbearance Agreement
On December 1, 2019, McDermott, MTA, MTUS (together with MTA, the “Issuers”) and certain subsidiaries of McDermott (the “Note Guarantors” and, together with the Issuers and McDermott, the “Note Parties”) entered into a Forbearance Agreement (the “Forbearance Agreement”) pursuant to that certain Indenture, dated as of April 18, 2018, by and among McDermott, certain subsidiaries of McDermott and Wells Fargo Bank, National Association, as trustee (the “Indenture”) with an ad hoc group (the “Ad Hoc Group”) of holders of approximately 35% of MTA’s and MTUS’ 10.625% Senior Notes due 2024 (the “Senior Notes”). Pursuant to the Forbearance Agreement, the Ad Hoc Group has agreed to forbear from the exercise of certain rights and remedies that they have under the Indenture and supporting documents, including agreeing not to accelerate the Senior Notes obligations (and to instruct the trustee not to accelerate the Senior Notes obligations) as a result of the failure to make the Interest Payment. They have agreed to continue this forbearance until the earlier of (i) 11:59 p.m. (New York City time) on January 15, 2020 (the “Forbearance Deadline”); (ii) the failure of any Note Party to comply with any term, condition or covenant set forth in the Forbearance Agreement; (iii) the failure of any representation or warranty made by any Note Party under the Forbearance Agreement to be true and complete in all material respects (except that such materiality qualifier shall not be applicable to the extent that any representation and warranty already is qualified or modified by materiality in the text thereof) as of the date when made or any other breach in any material respect of any such representation or warranty; or (iv) December 16, 2019 if a face-to-face meeting among McDermott, the Ad Hoc Group, and the Secured Lenders (as defined in the Forbearance Agreement) has not occurred by such date. The Forbearance Deadline may be extended by consent of a majority of the Ad Hoc Group.
The foregoing description of the Forbearance Agreement is a summary only and is qualified in its entirety by reference to the complete text of the Forbearance Agreement, a copy of which is attached as Exhibit 10.4 to this report and is incorporated herein by reference.
Consent and Waiver Agreement
On December 1, 2019, McDermott entered into a Consent and Waiver Agreement (the “Consent and Waiver Agreement”) with West Street Capital Partners VII Offshore Investments, L.P., West Street Capital Partners VII – Parallel B, L.P., West Street Capital Partners VII B, L.P. and Apicorp Managed Account Investment Vehicle, L.P. (collectively, the “Preferred Stockholders”), pursuant to which, among other things, the Preferred Stockholders consented to (i) McDermott’s adoption of an amendment to its Certificate of Designation of 12% Redeemable Preferred Stock of McDermott, dated October 30, 2018, as amended by the Certificate of Amendment thereto, dated October 24, 2019, to allow for the incurrence of additional indebtedness pursuant to the Superpriority Credit Agreement and (ii) McDermott’s incurrence of additional indebtedness under the Superpriority Credit Agreement.