Ultra Petroleum gets $2.4 billion financing commitment, tweaks plan

By Caroline Salls

Pittsburgh, Feb. 9 – Ultra Petroleum Corp. obtained a commitment from Barclays Bank plc under which Barclays will provide a total of $2.4 billion in secured and unsecured financing in connection with the company’s proposed plan of reorganization, according to an 8-K filed Thursday with the Securities and Exchange Commission.

Ultra Petroleum said the financing will consist of a $600 million seven-year senior secured first-lien term loan credit facility, a $400 million five-year senior secured first-lien revolving credit facility with an initial borrowing base of $1 billion with scheduled semi-annual redeterminations starting on Oct. 1, 2017 and $1.4 billion in senior unsecured bridge loans.

The unsecured loans will consist of a five-year bridge facility in a total principal amount of $700 million, less the total principal amount of any privately placed five-year senior unsecured notes issued on or before the closing date of the credit facilities and an eight-year bridge facility in a total principal amount of $700 million, less the principal amount of any privately placed eight-year senior unsecured notes.

The company said the revolver is expected to have capacity for the Ultra debtors to increase the commitments, have $100 million of the commitments available for the issuance of letters of credit and require Ultra to maintain a maximum total net debt-to-EBITDAX ratio of 4.25 to 1 as of the end of the first full fiscal quarter after the closing date and each subsequent fiscal quarter of 2017 and 4 to 1 as of the end of each fiscal quarter thereafter, a minimum current ratio of 1 to 1 and a minimum interest coverage ratio of 2.5 to 1.

The term loan facility is expected to have capacity for the debtors to increase commitments.

Based on the indicative pricing levels provided to the company, Ultra said the blended interest rate of the credit facilities on the plan effective date is expected to be 5.1%.

The commitments of Barclays to provide the credit facilities are subject to the plan support parties’ satisfaction with the approval by the U.S. Bankruptcy Court for the Southern District of Texas of all actions to be taken, undertakings to be made and obligations to be incurred in connection with the facilities.

The outside termination date for the commitment letter is May 9.

Under a second amended plan filed Wednesday, which incorporates the terms of the proposed Barclays exit financing, holders of operating company funded debt claims and general unsecured claims will be paid in full in cash. These treatments were amended to remove voting and other recovery contingencies contained in the previous version of the plan.

No other creditor treatment changed under the second amended plan.

Ultra Petroleum is a Houston-based independent exploration and production company. The company filed bankruptcy on April 29, 2016 under Chapter 11 case number 16-32202.

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