S&P puts BEP Ulterra on positive watch

S&P said it placed its B- ratings for BEP Ulterra Holdings Inc. and its senior secured debt on CreditWatch with positive implications.

The positive watch reflects the news that Patterson-UTI Energy Inc. agreed to buy BEP Ulterra’s operating subsidiary Ulterra Drilling Technologies LP for $370 million in cash and 34.9 million Patterson-UTI shares, S&P said.

“The CreditWatch placement reflects the likelihood that we will raise the rating on Ulterra following the close of its acquisition by higher-rated Patterson-UTI (BB+/watch pos/--). We will likely view Ulterra as a core subsidiary of Patterson given its complementary drill-bit product offering and its growing international footprint, primarily in the Middle East.

We expect Ulterra's term loan (approximately $398 million outstanding as of March 31, 2023) will be paid off at closing,” the agency said in a press release.

The deal is subject to customary closing conditions and the required regulatory approvals.

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