McDermott International Inc (NYSE: MDR) is having an incredibly strong start to the trading session this morning after announcing the closing of a transaction. The news excited investors, sending the stock on a run for the top. Today, we’ll talk about:
- The transaction;
- what we’re seeing from MDR as a result; and
- what we’ll be watching for ahead.
MDR Closes Private Placement
As mentioned above, McDermott International is having a strong day in the market today after announcing the closing of a transaction. In a press release issued early this morning, the company said that it has closed the private placement of $300 million of redeemable preferred stock and warrants to purchase up to 6,773,094 shares of common stock. In the release, MDR said that the transaction was closed with investment funds managed by the Merchant Banking Division of The Goldman Sachs Group. The transaction also came with a $230 million letter-of-credit facility.
The company said that net proceeds from the private placement are expected to be used for general corporate purposes. This includes working capital requirements. Also, the company said that the letter-of-credit capacity is expected to enhance the company’s rediness to book anticipated strong order intake.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of McDermott International, the news proved to be incredibly positive. After all, the closing of this transaction will lead to a stronger financial foundation for which the company can build upon. So, it comes as no surprise to see that excited investors are pushing the stock on a run for the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (10:12), MDR is trading at $8.78 per share after a gain of $0.50 per share or 6.11% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on MDR. In particular, we’re interested in following the story surrounding the company’s orders ahead. As mentioned above, the company said in the press release that the letter-of-credit facility will assist the company in the ability to take on strong order growth. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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