S&P cuts Sheridan Fund II

S&P said it lowered its long-term issuer credit ratings on Sheridan Production Partners II-A, LP, Sheridan Investment Partners II, LLC, and Sheridan Production Partners II-M, LP (collectively referred to as "Sheridan Fund II") to CCC- from CCC+.

The outlook is negative.

At the same time, S&P lowered the issue ratings on the revolving credit facility and the senior secured term loan to CCC+ from B and the issue rating on the subordinated term loan to CCC from B-.

The recovery ratings on the revolving credit facility and the senior secured term loan are 1, indicating an expectation of very high (90%-100%, rounded estimate: 95%) recovery to creditors in the event of a default. The recovery rating on the subordinated term loan is 2, indicating an expectation for substantial recovery (70%-90%, rounded estimate: 75%) to creditors in the event of a default.

“The downgrade reflects Sheridan Fund II's liquidity pressures from its elevated interest expenses,” S&P said in a news release.

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