On April 1, 2016, Ultra Petroleum Corp. decided to defer making an interest payment of approximately $26 million due on April 1, 2016 with respect to the company's 6.125% senior notes due 2024.
Following that action, Standard & Poor's Ratings Services lowered Ultra's corporate credit rating to 'D,' adding that it believes Ultra will not pay its interest obligation within the 30-day grace period. S&P lowered Ultra's issue-level debt rating on subordinated senior unsecured debt from to 'D,' putting expected recovery from 0-10%.
In its energy daily update April 5, Raymond James reminded readers that Ultra drew down the remainder of its $1 billion credit facility earlier in the year, noting the move is indicative that "efforts to sell assets to shore up the balance sheet were unsuccessful." With that, Raymond James calls Ultra's current debt levels "a concerning headwind" with bankruptcy a likely result.