Item 1.01
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Entry into a Material Definitive Agreement.
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Purchase Agreement
On April 4, 2018, McDermott Escrow 1, Inc. and McDermott Escrow 2, Inc. (together, the Escrow Issuers) agreed to sell $1,300,000,000 in
aggregate principal amount of 10.625% senior unsecured notes due 2024 (the notes) pursuant to the terms of that certain purchase agreement (the Purchase Agreement) dated April 4, 2018, by and among McDermott
International, Inc. (McDermott), the Escrow Issuers, McDermott Technology (Americas), Inc. (McDermott Technology (Americas)) and McDermott Technology (US), Inc. (together with McDermott Technology (Americas), the
Post-Merger
Co-Issuers)
and Barclays Capital Inc., as the representative of the several initial purchasers named on Schedule A thereto (collectively, the Initial Purchasers). The notes
have been offered to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the Securities Act), and to certain
non-U.S.
persons in transactions
outside the United States in reliance on Regulation S under the Securities Act. The notes are scheduled to mature on May 1, 2024.
The proceeds of
the offering will be deposited into a segregated escrow account until the date on which certain escrow conditions are satisfied and the escrow proceeds are released (the Escrow Conditions). Concurrent with the satisfaction of the Escrow
Conditions, the Escrow Issuers will merge with and into the Post-Merger
Co-Issuers,
with each Post-Merger
Co-Issuer
being a surviving entity that will assume, by
operation of law, the obligations of the applicable Escrow Issuer under the notes and the indenture governing the notes.
Upon the consummation of the
business combination (the Combination) between McDermott and Chicago Bridge & Iron Company N.V. (CB&I), the notes will be jointly and severally guaranteed on a senior unsecured basis by McDermott, each of
McDermotts and CB&Is material restricted subsidiaries (other than the Post-Merger
Co-Issuers)
that guarantees indebtedness of either Post-Merger
Co-Issuer
or any guarantor under the new credit agreement to be entered into in connection with the Combination.
Upon satisfaction of the Escrow Conditions, the Post-Merger
Co-Issuers
intend to use the net proceeds from the
offering of the notes to pay a portion of the purchase price for the pending acquisition of the technology operations of CB&I in connection with the Combination.
The notes will be subject to a special mandatory redemption if the Escrow Conditions are not satisfied or the issuers of the notes determine in their
discretion that the Escrow Conditions are incapable of being satisfied on or prior to June 29, 2018.
The Purchase Agreement contains customary
representations and warranties of the parties and indemnification and contribution provisions under which the Escrow Issuers, the Post-Merger
Co-Issuers
and McDermott, on one hand, and the Initial Purchasers,
on the other, have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act, and customary conditions to closing, obligations of the parties and termination provisions.
Some of the Initial Purchasers and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the
ordinary course of business with McDermott or its affiliates. The Initial Purchasers have received, or may in the future receive, customary fees and commissions for these transactions.
The foregoing description of the Purchase Agreement is only a summary and is qualified in its entirety by reference to the full text of the Purchase
Agreement, a copy of which is filed as Exhibit 1.1 to this Current Report on Form
8-K
and is incorporated herein by reference.