Offshore oil and gas-focused engineering and construction
McDermott International Inc.
) has priced senior secured notes worth $500 million. The
second-lien notes, carrying an interest rate of 8.00%, are
expected to mature by 2021. The offering is likely to close on
Apr 16, 2014.
The senior notes will likely be priced at par and are expected
to be offered to selected institutional investors. McDermott
reveals that the net proceeds of roughly $491.0 million will
likely be utilized for refinancing revolving credit facility
under its present credit contract. The funds will also be spent
on normal corporate activities.
McDermott is planning to release its first-quarter 2014
financial results on May 7, 2014, after the closing bell. The
Zacks Consensus Estimate for the company's first-quarter is
pegged at a loss of 9 cents per share.
Houston, Texas-based McDermott primarily serves the worldwide
offshore oil and gas field developments, including the front-end
design and detailed engineering, fabrication and installation of
offshore drilling and production facilities.
On Mar 31, 2014, McDermott declared that its first-quarter
2014 results might not meet its recent projection. Moreover, the
company apprehends that its profit margin, from the operation of
backlog projects, will not be able to cover its fixed expenses −
direct operating costs and general and administrative expenses -
and restructuring costs.
Thus, McDermott currently has a Zacks Rank #5 (Strong Sell),
implying that it is expected to significantly underperform the
broader U.S. equity market over the next one to three months.
Meanwhile, one can look at better ranked players in the energy
Range Resources Corp.
Helmerich & Payne Inc.
). All the stocks sport a Zacks Rank #1 (Strong Buy).
HELMERICH&PAYNE (HP): Free Stock Analysis
MCDERMOTT INTL (MDR): Free Stock Analysis
RANGE RESOURCES (RRC): Free Stock Analysis
UNIT CORP (UNT): Free Stock Analysis Report
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