Narrative
Full Description
Project narrative
On December 15, 2013, financial close was reached on a deal in which a syndicate of nine banks — including the Industrial and Commercial Bank of China (ICBC) — entered into a $800.00 million USD senior secured syndicated term loan agreement with Sheridan Investment Partners II, L.P., Sheridan Production Partners II-M, L.P., and Sheridan Production Partners II-A, L.P. — three Delaware-incorporated special purpose vehicles and wholly-owned subsidiaries of Sheridan Holding Company II LLC, a Delaware-incorporated oil and gas fund based in Houston, Texas that invests in mature onshore producing properties in Texas, New Mexico and Wyoming, based in Houston, Texas and is managed by Houston-based explorer company Sheridan Production Partners LLC — for the Sheridan II Portfolio Refinancing Project. This loan was divided into three tranches: a $671.71 million USD term loan tranche with Sheridan Investment Partners II, L.P. as the borrower, a $93.44 million USD term loan tranche with Sheridan Production Partners II-A, L.P. as the borrower, and a $34.85 million USD term loan tranche with Sheridan Production Partners II-A, L.P. as the borrower. This senior secured first lien loan carried a maturity period of seven years and a final maturity date of December 16, 2020 and an interest rate based on a floating rate. This loan was secured by (i.e. collateralized against) first lien against some assets of Sheridan Production Partners II. Bank of America, N.A. served as administrative anent and collateral agent. The proceeds were to be used by the borrower to refinance a debt facility in connection with a portfolio of mature oil and gas producing properties in onshore basins in Texas and Wyoming. Each lender, including ICBC, contributed $74.63 million USD to the $671.71 million USD term loan tranche (captured by Record ID#107744), $10.38 million USD to the $93.44 million USD term loan (captured by Record ID#107745), and $3.87 million USD to the $34.85 million USD term loan tranche (captured by Record ID#107746). In addition to ICBC, the following lenders contributed to the loan syndicate: Bank of America, N.A., BMO Capital Markets, Citigroup, ING Group N.V., Royal Bank of Canada (RBC), Royal Bank of Scotland (RBS), UBS AG, and Wells Fargo Bank. On September 15, 2019, Sheridan Holding Company II LLC and eight affiliated debtors filed a Chapter 11 bankruptcy case in the United States Bankruptcy Court Southern District of Texas with a nearly-fully-consensual prepackaged plan of reorganization to eliminate approximately $900 million USD of its $1.1 billion USD pre-petition debt; the oil and gas market downturn, including the depression of crude oil prices in the Permian Basin, where Sheridan II had most of its assets (the bulk of its assets were purchased from SandRidge Energy), caused difficulty for the borrowers. The plan would give the revolving lenders and term lenders (the latter including BOC) collectively 95% of the common stock in the reorganized entity with the subordinated term lenders getting the remaining 5%. In November 2019, Sheridan Holding Company II LLC then proposed a new plan, to sell most of its assets to private investors for $328 million USD, specifically Crossing Rocks Energy Operating LLC, which required the approval of certain secured lenders to do the deal. As of $543.1 million USD of the $800 million USD syndicated term loan was outstanding.