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McDermott gets forbearance agreement, $350 million of facilities
By Angela McDaniels
Tacoma, Wash., Dec. 2 – McDermott International, Inc. entered into a forbearance agreement with the holders of more than 35% of its 10 5/8% senior notes due 2024 and was granted access to tranche B of its $1.7 billion super-priority senior secured credit facility, according to a company news release.
The participating noteholders agreed to forbear from exercising any rights related to the interest payment due on Nov. 1, subject to certain conditions.
The forbearance period runs through Jan. 15 and may be extended by a majority of the holders party to the forbearance agreement.
McDermott said it is in discussions with additional holders of the 10 5/8% notes and anticipates that additional holders may execute the forbearance agreement in the coming days.
The company continues to pursue strategic alternatives process for Lummus Technology.
Tranche B
Tranche B provides McDermott with a $250 million term loan and a $100 million letter-of-credit facility.
The company expects to use the amounts available under tranche B to continue financing working capital and support the issuance of required performance guarantees on new projects.
McDermott expects tranche B to allow it to continue “collaborative discussions” about a “long-term balance sheet solution.”
In connection with the tranche B funding, the required lenders have agreed to amendments to the credit agreement that would waive certain conditions and modify cross-default provisions in order to facilitate the tranche B funding.
McDermott is a Houston-based provider of technology, engineering and construction solutions to the energy industry.
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