Moody's calls Jupiter in limited default

Moody's Investors Service said it appended a limited default (LD) designation to Jupiter Resources Inc.'s Ca-PD probability of default rating, reflecting the expiration of the 30-day grace period on its missed interest payment due Oct. 1.

On Oct. 30, Jupiter announced a recapitalization plan that would convert 100% of its $1.1 billion senior unsecured notes due 2022 to equity.

The transaction will be implemented by way of a corporate plan of arrangement and will be subject to approval by the courts, Moody's said.

The LD designation will be removed if the recapitalization plan closes and Jupiter's ratings will be withdrawn on close, the agency explained.

Jupiter's Ca corporate family rating, Ca senior unsecured notes rating and negative outlook are unchanged.

The ratings reflect the very high likelihood that the capital restructuring plan will be approved and close, Moody's said.

The agency said it believes Jupiter's capital structure is unsustainable at current weak Alberta natural gas prices and limited future hedges for 2019.

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