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McDermott to receive up to US$1.7 billion of new financing

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Oilfield Technology,

McDermott International, Inc. has entered into an agreement (the Agreement) with certain of its secured lenders (the Lenders) under which the company will have access to up to US$1.7 billion of additional financing, including letter of credit capacity.

Under the terms of the Agreement, McDermott will have immediate access to US$650 million of financing comprised of US$550 million under a term loan facility and US$100 million under a letter of credit facility, before reduction for related transaction fees and expenses.

The company expects to utilise the amounts available under the Agreement to finance working capital and support the issuance of required performance guarantees on new projects.

"This new credit agreement is a continued signal from our lenders that they support McDermott, our underlying business, growth strategy and ability to achieve a long-term balance sheet solution," said David Dickson, President and CEO of McDermott. "The Agreement provides near-term liquidity for the Company to manage working capital and provide performance guarantees on expected new awards. We remain focused on serving our customers' needs, supporting our dedicated employees and maintaining our valued relationships with our subcontractors, suppliers and other business counterparties, all as part of our efforts to enhance our position as a premier, fully integrated provider of technology, engineering and construction solutions to the energy industry."

McDermott has said it is continuing to pursue the previously announced strategic alternatives process for Lummus Technology and the sale process for the remaining portion of the pipe fabrication business. McDermott has decided to terminate its previously announced sale process for its industrial storage tank business.

The company's ability to access the remaining amount of financing under the Agreement is subject to various conditions that are at the discretion of the Lenders. Those conditions are detailed in the Form 8-K that the company has filed with the US Securities and Exchange Commission (the Form 8-K).

McDermott also announced that it is withdrawing its previously stated guidance for full-year 2019. Separately, the presentation material used by the company in discussions with the Lenders regarding the new financing is included as an exhibit to the Form 8-K.

Kirkland & Ellis LLP is serving as legal counsel to McDermott in connection with the new financing and related matters, Evercore is serving as financial advisor and AP Services, LLC, an affiliate of AlixPartners, is serving as operational advisor. Barclays is acting as lead arranger on the financing.

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