S&P affirms Sheridan Fund I

S&P said it affirmed its CCC+ long-term issuer credit ratings on Sheridan Production Partners I-A, Sheridan Investment Partners I and Sheridan Production Partners I-M (collectively Sheridan Fund I).

The outlook remains negative.

At the same time, the agency affirmed the B issue ratings on both the first-lien senior secured term loan and the revolving credit facilities. The recovery rating remains 1, indicating expectations for very high (90% to 100%, rounded estimate: 95%) recovery in the event of a payment default.

“The affirmation of the ratings reflects the fund's continued high leverage burden, its near-term liquidity pressures, and its tight cushion relative to its increasing interest coverage covenants,” S&P said in a news release.

“Despite significant headwinds, we believe the company potentially will be able to refinance its debt and extend some of its maturities given the recent rebound in crude oil prices.”

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