On June 17, 2019 publicly traded gas exploration company Ultra Petroleum Corp (UPL) issued a press release announcing the extension of an offer to exchange the 7.125% Senior Notes due 2025 of its wholly owned subsidiary, Ultra Resources, Inc. for up to $90.0 million aggregate principal amount of new 9.00% Cash / 2.50% PIK Senior Secured Third Lien Notes due 2024, aka the Third Lien Notes. Unaffected directly is the only BDC with exposure – FS Energy & Power – whose investment of $45mn at face value is in the $975mn April 2024 senior secured Term Loan. That’s one of multiple debt facilities in this heavily leveraged company, with nearly $2.0bn in debt, even after shedding both Term loan and Revolver outstandings, as detailed in the latest 10-Q and on the IQ 2019 Conference Call. Thankfully, the BDC’s debt sits at the top of the capital structure, just under a Revolver, whose balance was only $38mn. Whether the exchange happens or not, though, the company will remain on our Watch List, given the large amount of debt and the fact that the price of Ultra’s common stock has dropped to an all-time low. The stock used to trade at over $15.0 a share, but is now at $0.35. There is close to $3.0mn of investment income at risk for FS Energy & Power.