McDermott in new $810 million credit agreement

U.S. engineering, procurement, construction and installation company McDermott has entered into a five-year amended and restated credit agreement with $810 million of capacity for letters of credit and a $300 million revolving cash sublimit.

Additionally, the agreement allows for current or new lenders to increase commitments up to a total of $1 billion, the company said on Monday.

The amended and restated facility will replace McDermott’s previous $450 million credit agreement dated April 16, 2014 (as amended) and will extend the maturity until 2022, provided that McDermott’s existing senior secured notes are repaid by December 2020.

In conjunction with the amended and restated credit agreement, McDermott repaid in full the outstanding term loan under the previous credit agreement.

“The increased limit of the facility, the $300 million revolving cash sublimit, as well as the extended maturity are a culmination of the financial transformation McDermott has made over the past few years,” said Stuart Spence, McDermott’s Executive Vice President and Chief Financial Officer.

Spence further added: “The increased facility capacity underscores the confidence and support shown by our current and new lenders entering the facility and provides us with a simplified capital structure, increased balance sheet flexibility and positions us well for future growth.”

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