S&P cuts Ultra Petroleum

S&P said it downgraded Ultra Petroleum Corp. to D from CCC- after it failed to make the required interest payments on its unsecured notes.

At the same time, S&P dropped the ratings on the company’s senior secured term loan, second-lien notes, and unsecured notes to D. The 1 recovery rating (90%-100%; rounded estimate: 95%) on the term loan, 2 recovery rating (70%-90%; rounded estimate: 85%) on the second-lien notes, and 6 recovery rating (0%-10%; rounded estimate: 0%) on the unsecured notes remain unchanged.

“The company had previously disclosed a going concern qualification in its 10-K report, which led to a default under the credit agreements for its reserve-based lending (RBL) facility and term loan. Ultra also revealed that discussions with its creditors about a potential out-of-court restructuring have ceased, and talks have shifted toward negotiating terms ahead of a probable Chapter 11 bankruptcy filing,” said S&P in a press release.

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