McDermott International satisfied all conditions to the amendment to the company’s senior secured credit agreement which, in part, extends the maturity date of the letter of credit facility under the senior secured credit agreement to April 22, 2019 (or January 15, 2019 if the term loan remains outstanding or is not refinanced by that date).
Amendment No. 3 provides $450 million of letter of credit capacity with the potential to increase to $600 million under an accordion feature. The amendment also provides flexibility by increasing the baskets for purchase money indebtedness, acquisitions and purchases of junior priority debt and extending the window to mortgage the DLV 2000 by one year to allow the company to consider potential financing options.
In connection with obtaining term lender consents to amendment No. 3, the company prepaid $75 million of the term loan and entered into amendment No. 4 to the company’s senior secured credit agreement. Amendment No. 4 increased the applicable margin on the term loan by 300 basis points per annum and requires the company to apply the proceeds from any financing of the DLV 2000 to repay the term loan. “We believe the overall package associated with term lender consents is favorable given the current energy capital market conditions and provides a benefit through reduction in leverage,” CFO Stuart Spence said.
According to a related SEC filing, Credit Agricole served as administrative agent, collateral agent, joint lead arranger and joint bookrunner. Wells Fargo and ABN AMRO Capital served as joint lead arrangers, joint bookrunners and syndication agents.