McDermott Completes Amendments to Credit Facilities
McDermott International has recently completed amendments to two of its subsidiaries' outstanding credit facilities, which have a combined borrowing and performance-related letter of credit capacity of $900 million. Currently, there are no borrowings under either facility, although approximately $510 million of combined performance-related letters of credit are currently outstanding.
Following the previously announced upgrades from the major credit ratings agencies, McDermott requested from its lenders a number of modifications to these existing credit facilities. Among the significant new financial terms, the amended facilities have lower applicable margins for borrowings and letters of credit, which will save between 50-150 basis points annually compared to the previous cost. McDermott estimates that it will realize approximately $5 million per year of pretax savings, excluding initial arrangement fees, as a result of the amended financial terms, subject to the revised ratings-based pricing grid.
"McDermott appreciates the strong support of the many financial institutions participating in our amended credit facilities," said Michael S. Taff, Senior Vice President and Chief Financial Officer. "Both of these facilities are now completely supported by commercial banks, which demonstrates our improved credit profile, strong financial relationships and the lenders' confidence in our respective subsidiaries."
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