S&P cuts Sheridan; notes at B-

Standard & Poor's said that it lowered Sheridan Group Inc.'s corporate credit rating to CCC+ from B. All ratings remain on CreditWatch, but the implications were revised to developing from negative.

The ratings were placed on Credit Watch with negative implications on Oct. 11 due to the risks associated with significant near-term maturities and an adverse audit opinion, the agency said.

S&P assigned Sheridan's new $150 million of senior secured notes due 2014 a preliminary issue-level rating of B- and a 3 recovery rating, indicating the expectation of meaningful (50% to 70%) recovery for lenders in the event of a payment default.

The company plans to use the proceeds to refinance its existing senior secured notes.

The CreditWatch developing listing is based on Sheridan's declining liquidity due to its significant near-term maturities and risks associated with its auditor's opinion, the agency said.

The CCC+ corporate credit rating reflects Sheridan's weak liquidity given its near-term maturities as well as the expectation of continued difficult operating conditions across the company's niche printing segments, high debt leverage, less than adequate liquidity and the secular shift away from print media, the agency added.

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