S&P lowers Ultra Petroleum

S&P said it lowered its corporate credit rating on Ultra Petroleum Corp. to CCC+ from B.

The outlook is negative.

At the same time, the agency lowered the issue-level rating on the company's senior secured term loan due 2024 to B from BB-. The recovery rating remains 1, indicating an expectation of very high (90% to 100%; rounded estimate: 95%) recovery in the event of a payment default.

S&P also lowered the issue-level rating on the company's 2022 and 2025 senior unsecured notes to CCC+ from B. The recovery rating is 3, indicating meaningful (50%-70%; rounded estimate: 65%) recovery.

“The downgrade reflects our assessment that Ultra is becoming increasingly vulnerable with a high debt burden that appears unsustainable over the long-term without significant improvement in operational execution and realized natural gas prices,” the agency said in a news release.

“Furthermore, although Ultra is not necessarily facing a near-term liquidity issue, it may try to facilitate a distressed exchange and could require additional relief for its leverage covenant in the next 12 to 18 months.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.