HOUSTON, April 18, 2016 (GLOBE NEWSWIRE) -- 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.