Featured Company News – McDermott Announced $810 Million Credit Agreement; Set to Increase Letter of Credit Capacity
LONDON, UK / ACCESSWIRE / July 6, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for McDermott International, Inc. (NYSE: MDR), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=MDR. The Company announced on July 03, 2017, that it has entered into a 5-year Amended and Restated Credit Agreement with $810 million of capacity for letters of credit and $300 million revolving cash submit. Also, the agreement allows for current or new lenders to increase commitment, up to a total of $1.0 billion. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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The Announcement
This amended and restated facility, according to the Company will replace McDermott's previous $450 million Credit Agreement which was dated April 16, 2014, and will extend the maturity until 2022, subject to the case that McDermott's existing senior secured notes are repaid by December 2020. In conjunction with the Amended and Restated Credit Agreement, the Company repaid the outstanding Term Loan, in full, under the previous Credit Agreement.
McDermott operates in over 20 countries across the world and delivers engineering, procurement, construction, and installation (EPCI) services for upstream field developments worldwide. The Company views the announcement of the increased limit of the facility, and the $300 million revolving cash sub-limit, as well as the extended maturity, as a step to reinforce its financials. The increased facility capacity, according to the Company, delivers a simplified capital structure, increased balance sheet flexibility, and positions it for future growth.
Updated Guidance
The Company recently announced its Q1 FY17 results on April 25, 2017, where net revenue for the three-month period ended March 31, 2017, was $519.4 million lower than the $729.0 million reported in Q1 FY16. The Company also updated its FY17 guidance, where it forecasted revenues of $3.2 billion for full-year FY17. Net operating income for FY17 is expected to be $265 million, against the previously forecasted $265 million. The Company attributed the increased profitability and cash flow to closeouts from project executions in Q1 FY17 and customer-driven change orders awarded in the quarter.
Company Growth Prospects
On June 05, 2017, the Company announced that it was awarded an EPIC contract from BP Trinidad & Tobago, LLC, for the Angelin gas field, located 25 miles off the east coast of Trinidad and Tobago. This EPIC contract followed the successful completion of a multi-phase engineering contract, under which the Company initially delivered pre-front-end engineering design (pre-FEED), front-end engineering design (FEED), and pre-execution engineering contracts. McDermott, under terms of the contract, agreed to deliver a turnkey EPIC solution to design, procure, fabricate, transport, install, and commission a six-slot wellhead platform and 26-inch (66 centimeters) subsea pipeline using its project management and engineering team in Houston.
The Company announced on March 08, 2017, that it plans to construct offshore production solutions in Saudi Arabia. The Company signed a MoU with Saudi Aramco for a long-term land lease at the new maritime facility at Ras Al Khair in Saudi Arabia, currently being developed by Saudi Aramco. The Company additionally plans to build a new fabrication and marine complex expected to use state-of-the-art facilities, increased automation, and an optimized layout, so as to increase abilities to service in its growing presence in the Middle-East and Caspian markets.
Last Close Stock Review
On Wednesday, July 05, 2017, the stock closed the trading session at $7.28, falling 3.83% from its previous closing price of $7.57. A total volume of 4.99 million shares have exchanged hands, which was higher than the 3-month average volume of 3.97 million shares. McDermott's stock price skyrocketed 17.61% in the past one month, 10.81% in the last three months and 51.04% in the previous twelve months. The stock is trading at a PE ratio of 35.51. At Wednesday's closing price, the stock's net capitalization stands at $2.03 billion.
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