J. Ray McDermott Completes Tender Offer and Closes $500 Million Credit Facility
June 06 2006 - 4:50PM
Business Wire
J. Ray McDermott, S.A. ("J. Ray"), a subsidiary of McDermott
International, Inc. ("McDermott") (NYSE:MDR), announced today it
has completed the previously announced cash tender offer and
consent solicitation (collectively, the "Offer") to purchase all of
J. Ray's outstanding 11% Senior Secured Notes due 2013 (the
"Notes"). Using current cash on hand, J. Ray purchased $200 million
in aggregate principal amount of the Notes (representing 100% of
the previously outstanding Notes) that were tendered pursuant to
the Offer and paid the related tender premiums. As previously
announced, J. Ray expects to recognize approximately $50 million of
expense in the second quarter of 2006 related to the early
extinguishment of the Notes. Also today, J. Ray announced it has
entered into a new $500 million senior secured credit facility. The
facility is comprised of a five-year, $400 million revolving credit
and letter of credit facility, and a six-year, $100 million
synthetic letter of credit facility. The new facility will be used
to provide J. Ray with letter of credit capacity and working
capital availability to support J. Ray's growth initiatives. As a
result of these new facilities, approximately $125 million of
previously restricted cash will become unrestricted and available
for general corporate purposes. J. Ray McDermott is a leading
provider of engineering, procurement, construction, and
installation services for offshore oil and gas field developments
worldwide. McDermott International, Inc. is a leading worldwide
energy services company. McDermott's subsidiaries provide
engineering, construction, installation, procurement, research,
manufacturing, environmental systems, project management and
facility management services to a variety of customers in the
energy and power industries, including the U.S. Department of
Energy. In 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 and uncertainties that may impact actual outcomes.
These forward-looking statements include our statements regarding
our intended uses of the new credit facility, the expense
associated with the Offer and the amount and timing of restricted
cash becoming unrestricted. Those statements are subject to
numerous uncertainties and risks including, without limitation, the
inaction of third parties and our credit needs. For a more complete
discussion of these risk factors, please see McDermott's filings
with the Securities and Exchange Commission, including its annual
report for the year ended December 31, 2005.
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