McDermott International enters into agreement for a new credit facility

By Sara Rosenberg

New York, Feb. 11 - McDermott International Inc. entered into an agreement with existing lenders for a new $180 million credit facility due April 30, 2004 that will replace the company's J. Ray McDermott and McDermott and BWX Technologies bank credit facilities, which were scheduled to expire on Feb. 21.

On May 13, the maximum amount available under the facility will be reduced to $166.5 million from $180 million.

The facility is secured by McDermott stock, J. Ray stock, J. Ray assets and various intercompany promissory notes.

Proceeds can be used by J. Ray and BWXT with sublimits for J. Ray of $100 million for letters of credit and $10 million for cash advances and for BWXT of $60 million for letters of credit and $50 million for cash advances.

Cash advances under the facility to BWXT will have an interest rate of Libor plus 400 basis points and for J. Ray the interest rate is Libor plus 500 basis points.

"This refinancing should provide adequate liquidity during the term of the credit facility and ample time to develop a permanent capital structure for the company after the resolution of the Babcock & Wilcox Chapter 11 proceedings," said Francis S. Kalman, executive vice president and chief financial officer, in a news release.

McDermott International is a New Orleans energy services company.

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