All data is delayed
See More

Moody's downgrades YPF

Jun 13 2012 08:26

Washington - Moody's on Tuesday downgraded its rating for Argentina's oil company YPF another notch, a month after Buenos Aires seized control of the country's largest oil firm, citing concerns over its debt.

The ratings agency downgraded YPF's global local currency rating to Caa1 from B3, but said its outlook was stable.

"The rating downgrade reflects YPF's near-term liquidity risk of debt acceleration and the ongoing challenge of meeting maturing short term debt obligations as they become due," Moody's said.

"Moody's believes that the company's large foreign currency needs for its foreign currency denominated debt increases the risk of a debt restructuring that would result in losses to creditors and prompt a distressed exchange default."

"Barring receipt of formal waivers from its lenders, a change-of-control and/or nationalisation could be deemed an event of default under certain YPF debt agreements, giving rise to acceleration rights," Moody's added.

The ratings agency noted that to date, "YPF has not received default or acceleration notices on any of its debt obligations."

Argentina declared YPF a public utility on April 16, with the government seizing a 51% stake in the subsidiary of Spain's Repsol - infuriating Madrid, and sparking concern in the United States and the European Union.

Later the same week, it extended the move to YPF Gas, a separate company 85% owned by a division of Repsol.

President Cristina Kirchner has argued that the expropriation was justified because YPF crude production had dropped while oil and gas imports doubled in 2011. Imports are forecast to triple by the end of the year.

repsol  |  ypf  |  moody's



Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


Marketing is a big concern in SA's small business community, followed by a lack of confidence and partnering with the wrong people, according to a survey.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The 25 basis points interest rate increase is:

Previous results · Suggest a vote