Market Overview

McDermott Completes Amendment To Extend Senior Secured Credit Deal

Share:

McDermott International, Inc. (NYSE: MDR) satisfied all conditions to the amendment to its Senior Secured Credit Agreement. As a result, a part extended the maturity of credit facility to April 22, 2019 or January 15, 2019 if the term loan remains outstanding or is not refinanced by that date under the Senior Secured Credit Agreement.

McDermott said that the amendment three provided $450 million of letter of credit capacity with the possibility of boosting it to $600 million under an accordion feature. The company added that the Amendment also offered flexibility by boosting the baskets for purchase money indebtedness, acquisitions and purchases of junior priority debt, as well as, extending the window to mortgage the DLV 2000 by one year to enable it to consider potential financing options.

The company disclosed that other provisions of Amendment Number three had become effective in April. That included amendment to replace the existing minimum EBITDA requirement with a covenant package comprised of two leverage ratios and a fixed charge ratio and removed or reduced certain reporting requirements to the Credit Agreement lenders.

McDermott EVP and CFO, Stuart Spence, said, "We are pleased with the outcome of this amendment process. We expect the extension of our letter of credit facility to 2019, increased basket capacity, and an extended window to mortgage the DLV 2000, along with our amended financial covenants, to provide maximum flexibility and letter of credit support to position us for continued steady bidding activity."

As far as obtaining term lender consents to Amendment No. 3, the company indicated that it prepaid $75 million of the term loan and struck into Amendment No. 4 to its Senior Secured Credit Agreement. According to the amendment No. 4, it increased the applicable margin on the term loan by 300 basis points per annum and required the Company to apply the proceeds from any financing of the DLV 2000 to repay the term loan.

Spence added, "We believe the overall package associated with term lender consents is favorable given the current energy capital market conditions and provides a benefit through reduction in leverage."

Posted-In: News Financing

 

Related Articles (MDR)

View Comments and Join the Discussion!
Fastest Market News Application
You'll Hear It First On Pro
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

The Quora Community Discusses Inspiring And Successful Business Models For Startups

U.S. Economy: Will April Showers Bring May Flowers?