J. Ray McDermott to Open $25 Million Credit Facility

McDermott International reports that one of its subsidiaries, J. Ray McDermott, S.A., has received and signed a commitment letter for a new $25 million letter-of-credit facility arranged by Morgan Stanley.

"Although we recently determined a larger letter-of-credit facility was no longer necessary at J. Ray because of the improving liquidity profile and having no immediate planned use of proceeds, we believe that this smaller facility will provide J. Ray with sufficient additional capacity should it be needed," said Frank Kalman, executive vice president and chief financial officer of McDermott. "We appreciate Morgan Stanley's confidence in J. Ray's turnaround, and are looking forward to closing the transaction on the agreed terms in the near future."

According to the commitment agreement, the term of the facility will be 36 months with an optional redemption by J. Ray after 18 months. In addition, the commitment has no financial covenants. Liens will be placed on certain J. Ray assets including its domestic accounts receivable and the DB26 vessel. The remaining terms and conditions are similar to those in J. Ray's senior, secured notes issued in 2003.