S&P rates Ultra Petroleum loan BB, notes BB-

S&P said it assigned a B+ corporate credit rating to Ultra Petroleum Corp.

The agency also said it assigned issue-level ratings to debt offered by Ultra's subsidiary, Ultra Resources Inc.

S&P said it assigned a BB rating to the company's proposed secured first-lien $600 million term loan. The recovery rating is 1, indicating 90% to 100% expected default recovery.

The agency also said it assigned a BB- rating to the company's proposed $1.4 billion unsecured notes. The recovery rating is 2, indicating 70% to 90% expected default recovery.

The outlook is stable.

The ratings consider Ultra's planned capital structure following reorganization through Ch. 11 bankruptcy, which converts about $1.3 billion of holding company debt to equity, S&P said.

Ultra intends to issue $2 billion in new debt to fund repayment to its credit facility lenders, its operating company noteholders and other claims.

S&P noted that, unusual for bankruptcies, the plan results in operating company creditors receiving full repayment in cash.

The agency said it views Ultra's business risk as fair and its geographic and production diversification limited.

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