S&P upgrades Metrogas, rates notes CCC

Standard & Poor's said it raised the corporate credit rating on Metrogas SA to CCC from D.

S&P also said it assigned a CCC rating to its $180 million series A senior notes due 2018.

The outlook is negative.

The upgrade and rating assignment follows the company's $314 million debt issuance in exchange for its defaulted financial and non-financial debt obligations, S&P said.

The notes are divided into series A $180 million notes due 2018 and series B $134 million notes.

The ratings reflect the company's vulnerable business risk profile and highly leveraged financial risk profile, S&P said.

The ratings also recognize Argentina's high political and regulatory risk, the company's exposure to foreign-exchange risk, somewhat high capital expenditures to meet growing demand for natural gas and weak liquidity, the agency said.

These weaknesses are partially offset by the company's solid competitive position, stemming from its exclusive concession to distribute natural gas to the city of Buenos Aires and the southern district of greater Buenos Aires, S&P said.

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