Just because a company files for bankruptcy doesn’t mean they can’t be a source of new business. Scott Greer, Matthew Warren and Jacob Jumbeck of King & Spalding explain what lenders should focus on when determining how to proceed with such debtors, using McDermott International’s recent Chapter 11 filing as an example.
McDermott International has received support of more than two-thirds of all its funded debt creditors for a restructuring transaction that will equitize nearly all the company’s funded debt, eliminating more than $4.6 billion of debt.
McDermott entered into an agreement with certain of its secured lenders to access to up to $1.7 billion of additional financing. Barclays is serving as lead arranger on the new financing.
McDermott International completed its merger with Chicago Bridge & Iron, creating a fully integrated provider of technology, engineering and construction solutions for the energy industry. Barclays and Credit Agricole agented a $4.65 billion credit agreement to support the transaction.
McDermott International entered into a five-year credit agreement with $810 million of capacity for letters of credit and a $300 million revolving cash sublimit. Crédit Agricole served as administrative agent and collateral agent for the transaction.
McDermott International satisfied all conditions to the amendment to the company’s senior secured credit agreement with a lender group led by Credit Agricole as administrative agent.
McDermott International amended its senior secured credit agreement to replace an existing minimum EBITDA requirement and remove or reduce certain reporting requirements to its lenders. Crédit Agricole agented the transaction.