Moody’s cuts Sheridan Investment, loans to Caa3

Moody's Investors Service said it downgraded Sheridan Investment Partners I, LLC's (SIP I), Sheridan Production Partners I-A, LP's (Fund I-A) and Sheridan Production Partners I-M, LP's (Fund I-M) corporate family ratings to Caa3 from B2 and probability of default ratings to Caa3-PD from B3-PD.

The senior secured term loans at all three issuers were also downgraded to Caa3 from B2.

The outlook remains negative.

"The downgrades of Sheridan I's ratings and negative outlook reflect the potential for a borrowing base deficiency and the further exacerbation of liquidity stress given low commodity prices," Moody's senior analyst Sreedhar Kona said in a news release.

"There is a high likelihood that Sheridan I will do additional discounted debt prepayments."

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