Item 1.01. Entry into a Material Definitive Agreement.
Amendments to Credit Agreements
On January 9, 2020, McDermott International, Inc., a Panamanian corporation
("McDermott"), McDermott Technology (Americas), Inc. ("MTA"), McDermott
Technology (US), Inc. ("MTUS") and McDermott Technology, B.V. ("MTBV"), each a
wholly owned subsidiary of McDermott, as co-borrowers, and various other
subsidiaries, as guarantors (the "Guarantors"), entered into Amendment No. 3
(the "Credit Agreement Amendment") to the Credit Agreement, dated May 10, 2018
(as amended, the "Credit Agreement"), by and among MTA, MTUS and MTBV,
as co-borrowers, McDermott, as a guarantor, the Guarantors, a syndicate of
lenders and letter of credit issuers, Barclays Bank PLC, as administrative agent
for the term facility under the Credit Agreement, and Crédit Agricole Corporate
and Investment Bank, as administrative agent for the other facilities under the
Credit Agreement.
Also, on January 9, 2020, McDermott, as a guarantor, and MTA, MTUS and MTBV,
as co-applicants, and the Guarantors, entered into Amendment No. 3 (the "LC
Agreement Amendment") to the Letter of Credit Agreement dated October 30, 2018
(as amended, the "Letter of Credit Agreement"), by and among McDermott, as
guarantor, MTA, MTUS and MTBV, as co-applicants, and the Guarantors.
The Credit Agreement Amendment:
• amends the events of default to provide that, through January 21, 2020,
the acceleration of MTA's and MTUS' 10.625% Senior Notes due 2024 (the
"Senior Notes") will not constitute an event of default; and
• amends the Credit Agreement to allow ordinary course auto-renewals of
letters of credit despite any acceleration, bankruptcy, or other event of
default.
Like the Credit Agreement Amendment, the LC Agreement Amendment:
• amends the events of default to provide that, through January 21, 2020,
the acceleration of the Senior Notes will not constitute an event of
default; and
• amends the Letter of Credit Agreement to allow ordinary course
auto-renewals of letters of credit despite any acceleration, bankruptcy,
or other event of default.
The foregoing descriptions of the Credit Agreement Amendment and the LC
Agreement Amendment are qualified in their entirety by reference to the full
text of the Credit Agreement Amendment and the LC Agreement Amendment, copies of
which are filed hereto as Exhibits 10.1 and 10.2, respectively, to this report
and are incorporated herein by reference.
Amendment to Superpriority Credit Agreement
On January 9, 2020, McDermott, as a guarantor, and MTA, MTUS and MTBV,
as co-borrowers entered into Amendment No. 2 (the "Superpriority Amendment") to
the superpriority senior secured credit agreement, dated October 21, 2019 (as
amended, the "Superpriority Credit Agreement"), with a syndicate of lenders and
letter of credit issuers (collectively, the "Superpriority Lenders"), Barclays
Bank PLC, as administrative agent for the Term Facility (as defined in the
Superpriority Credit Agreement), and Crédit Agricole Corporate and Investment
Bank, as administrative agent for the LC Facility (as defined in the
Superpriority Credit Agreement).
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The Superpriority Amendment:
• amends the events of default to provide that, through January 21, 2020,
the acceleration of the Senior Notes will not constitute an event of
default; and
• amends the Superpriority Credit Agreement to allow ordinary course
auto-renewals of letters of credit despite any acceleration, bankruptcy,
or other event of default.
The foregoing description of the Superpriority Amendment is qualified in its
entirety by reference to the Superpriority Amendment, a copy of which is filed
as Exhibit 10.3 to this report and is incorporated herein by reference.
Item 8.01 Other Events
At 11:59 p.m. (New York City time) on January 15, 2020, the forbearance deadline
under the Forbearance Agreement, dated December 1, 2019, by and among McDermott,
MTA, MTUS, certain subsidiaries of McDermott and an ad hoc group (the "Ad Hoc
Group") of holders of approximately 35% of MTA's and MTUS' 10.625% Senior Notes
due 2024 (the "Senior Notes") will expire. As a result, the Ad Hoc Group will no
longer be obligated to forbear from the exercise of certain rights and remedies
they have under the indenture governing the Senior Notes as a result of
McDermott's failure to make an interest payment of approximately $69 million,
which was due on November 1, 2019. Despite the expiration of the forbearance
deadline, McDermott continues to engage in constructive conversations with
holders of the Senior Notes.
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