The prepayment will decrease 2016 Ending Cash and corresponding Gross Debt by approximately $75 million. The change in interest rate will increase 2016 Net Interest Expense and Cash Interest by approximately $2 million. About McDermott McDermott is a leading provider of integrated engineering, procurement, construction and installation (EPCI) services for upstream field developments worldwide. The Company delivers fixed and floating production facilities, pipelines and subsea systems from concept to commissioning for complex Offshore and Subsea oil and gas projects to help oil companies safely produce and transport hydrocarbons. Our customers include national and major energy companies. Operating in more than 20 countries across the world, our locally focused and globally integrated resources include approximately 11,200 employees, a diversified fleet of specialty marine construction vessels, fabrication facilities and engineering offices. We are renowned for our extensive knowledge and experience, technological advancements, performance records, superior safety and commitment to deliver. McDermott has served the energy industry since 1923 and is listed on the New York Stock Exchange. As used in this press release, McDermott includes McDermott International, Inc. and its subsidiaries and affiliates. To learn more, please visit our website at www.mcdermott.com.Forward-Looking StatementIn accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, McDermott cautions that statements in this press release which are forward looking, and provide other than historical information, involve risks, contingencies and uncertainties that may impact McDermott's actual results of operations. These forward-looking statements include, among other things, statements about the potential increase in the letter of credit facility, increased flexibility, potential financing options and continued strong bidding activity. Although we believe that the expectations reflected in those forward-looking statements are reasonable, we can give no assurance that those expectations will prove to have been correct. Those statements are made by using various underlying assumptions and are subject to numerous risks, contingencies and uncertainties, including, among others risks relating to: the global demand for oil and gas and the fundamentals of the oil and gas industry, including the volatility of oil and gas prices; expectations regarding offshore development of oil and gas reserves; the volatility and uncertainty of credit markets; other general economic and business conditions and industry trends; our inability to successfully execute on contracts in backlog; changes in project design or schedules; the availability of qualified personnel; changes in the terms, scope or timing of contracts; contract cancellations, change orders and other modifications and actions by our customers and business partners; difficulties executing on projects; and changes in industry norms. If one or more of these risks materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected. For a more complete discussion of these and other risk factors, please see McDermott's annual and quarterly filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2015. This press release reflects management's views as of the date hereof. Except to the extent required by applicable law, McDermott undertakes no obligation to update or revise any forward-looking statement.
HOUSTON, May 16, 2016 (GLOBE NEWSWIRE) -- McDermott International, Inc. (NYSE:MDR) today announced that it has satisfied all conditions to the amendment to the Company's Senior Secured Credit Agreement ("Amendment No. 3") which in part extends the maturity date of the letter of credit facility under the Senior Secured Credit Agreement to April 22, 2019 (or January 15, 2019 if the term loan remains outstanding or is not refinanced by that date). Amendment No. 3 provides $450 million of letter of credit capacity with the potential to increase to $600 million under an accordion feature. The Amendment also provides flexibility by increasing the baskets for purchase money indebtedness, acquisitions and purchases of junior priority debt and extending the window to mortgage the DLV 2000 by one year to allow the Company to consider potential financing options. In April, McDermott announced that other provisions of Amendment No. 3 had become effective, including an amendment to replace the existing minimum EBITDA requirement with a covenant package comprised of two leverage ratios and a fixed charge ratio and removed or reduced certain reporting requirements to the Credit Agreement lenders. Stuart Spence, McDermott Executive Vice President and Chief Financial Officer, said, "We are pleased with the outcome of this amendment process. We expect the extension of our letter of credit facility to 2019, increased basket capacity, and an extended window to mortgage the DLV 2000, along with our amended financial covenants, to provide maximum flexibility and letter of credit support to position us for continued steady bidding activity." In connection with obtaining term lender consents to Amendment No. 3, the Company prepaid $75 million of the term loan and entered into Amendment No. 4 to the Company's Senior Secured Credit Agreement. Amendment No. 4 increased the applicable margin on the term loan by 300 basis points per annum and requires the Company to apply the proceeds from any financing of the DLV 2000 to repay the term loan. "We believe the overall package associated with term lender consents is favorable given the current energy capital market conditions and provides a benefit through reduction in leverage," Spence said.