S&P affirms Sheridan Fund II

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

The outlook remains negative.

At the same time, the agency affirmed the issue ratings on the revolving credit facility and the senior secured term loan at B. The recovery ratings are 1, indicating very high (90%-100%, rounded estimate: 95%) recovery prospects to creditors in the event of a default.

S&P also maintained the 2 recovery rating on the subordinated term loan, indicating an expectation for substantial recovery (70%-90%, rounded estimate: 85%), and affirmed the B- issue rating.

“The rating affirmation reflects the lack of immediate pressure on the fund given the borrowing base holiday until March 2019 and the lack of short-term debt maturities,” the agency said in a news release.

“In our opinion, however, the company could come under pressure once its borrowing base is redetermined in the spring of next year.”

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