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McDermott to Access $350 Million Tranche B Financing Under Superpriority Senior Secured Credit Facility
December 2, 2019
Source: PR Newswire
McDermott International, Inc. (NYSE:MDR) ("McDermott" or the "Company") announced today that it has been granted access to the second tranche ("Tranche B") of the $1.7 billion superpriority senior secured credit facility (the "Agreement") announced on October 21, 2019. Tranche B provides McDermott with a $250 million Term Loan Facility and a $100 million Letter of Credit Facility. The Company expects to utilize the amounts available under Tranche B to continue financing working capital and support the issuance of required performance guarantees on new projects.
McDermott also announced that it has entered into a forbearance agreement with holders of over 35 percent of McDermott's 10.625 percent senior notes due 2024 (the "2024 Notes"). Under the terms of the forbearance agreement, the applicable holders of the 2024 Notes have agreed to forbear from exercising any rights related to the interest payment due on November 1, 2019, subject to certain conditions. The forbearance period extends through January 15, 2020, and may be extended further by a majority of the holders party to the forbearance agreement. McDermott is in discussions with additional holders of the 2024 Notes and anticipates that additional holders may execute the forbearance agreement in the coming days.
The Tranche B funding is expected to allow McDermott to continue collaborative discussions regarding a long-term balance sheet solution. In connection with the Tranche B funding, the required lenders have agreed to amendments to the Agreement that would waive certain conditions and modify cross-default provisions in order to facilitate the Tranche B funding.
McDermott continues to pursue the previously announced strategic alternatives process for Lummus Technology.
McDermott is a premier, fully integrated provider of technology, engineering and construction solutions to the energy industry. For more than a century, customers have trusted McDermott to design and build end-to-end infrastructure and technology solutions to transport and transform oil and gas into the products the world needs today. Our proprietary technologies, integrated expertise and comprehensive solutions deliver certainty, innovation and added value to energy projects around the world. Customers rely on McDermott to deliver certainty to the most complex projects, from concept to commissioning. It is called the "One McDermott Way." Operating in over 54 countries, McDermott's locally focused and globally-integrated resources include approximately 32,000 employees, a diversified fleet of specialty marine construction vessels and fabrication facilities around the world. To learn more, visit www.mcdermott.com.
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