S&P gives McDermott DIP loans B

S&P said it assigned its B ratings to the $2.1 billion debtor-in-possession term loan and $743 million DIP letter of credit facility issued by McDermott Technology (Americas) Inc., McDermott Technology (US) Inc. and McDermott Technology BV, guaranteed by parent company, McDermott International Inc.

McDermott is currently operating under the protection of Chapter 11 of the U.S. Bankruptcy Code following a pre-negotiated filing on Jan. 21.

The DIP financing includes a roll-up of a prebankruptcy $866 million super-priority term loan and $200 million super-priority LC facility.

“Our B DIP issue ratings primarily reflect our view of the credit risk borne by the DIP lenders and is not indicative of any ratings that we may assign to exit facilities or the reorganized firm after bankruptcy,” the agency said in a news release.

“The DIP term loan has superpriority administrative expense claim status, which allows lenders to demand to be repaid in full in cash upon emergence from bankruptcy.

“The DIP issue ratings are point-in-time ratings effective only for the date of this report. We will not review, modify, or provide ongoing surveillance of the ratings.”

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