S&P cuts Ultra Petroleum to D

Standard & Poor’s said it lowered the corporate credit rating on Ultra Petroleum Corp. to D from CC.

S&P also lowered the issue-level ratings on the company’s structurally subordinated senior unsecured debt to D from C. The recovery rating remains 6, indicating an expectation of negligible (0% to 10%) recovery to creditors in the event of a default.

S&P said the rating action reflects Ultra Petroleum’s announcement that it has elected to defer the $26 million interest payment due April 1 on its 6 1/8% senior unsecured notes due 2024, and S&P’s belief that the company will not make this payment before the 30-day grace period ends.

S&P said the rating also reflects the agency’s view that the company will not meet its other financial obligations, including interest and principal payments on its other senior unsecured notes, and that it breached financial covenants at the end of the first quarter. The company is engaged in negotiations with debtholders.

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