S&P raises McDermott

Standard & Poor's said it raised its corporate credit rating on McDermott International Inc. and its subsidiaries, J. Ray McDermott SA and The Babcock & Wilcox Co., to BB from B+.

The outlook is stable.

In addition, the agency said it raised the rating on McDermott's senior secured bank debt to BB+ from B+, upgraded J. Ray McDermott's senior secured bank debt to BB from B+, revised the recovery rating on Babcock's debt to 1 from 3, and left the recovery rating on J. Ray McDermott's debt unchanged at 3.

The following factors drove the upgrades: strong performance at J. Ray McDermott as the subsidiary generated roughly $235 million in EBITDA in 2006, an improvement from $182 million in 2005, and that performance is likely to remain strong in the near term, the agency said.

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