McDermott to access $350mn Tranche B financing under superpriority senior secured credit facility

Enters into forbearance agreement with 2024 noteholders

David Dickson, president and CEO of McDermott.
David Dickson, president and CEO of McDermott.

McDermott International announced that it has been granted access to the second tranche (Tranche B) of the $1.7bn superpriority senior secured credit facility announced on 21 October 2019. Tranche B provides McDermott with a $250mn term loan facility and a $100mn letter of credit facility. The company expects to utilise 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% of McDermott's 10.625% senior notes due 2024 (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 1 November 2019, subject to certain conditions. The forbearance period extends through 15 January 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.

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