Fitch cuts Pan American Energy

Fitch Ratings said it lowered Pan American Energy SL, Argentine Branch's long-term local-currency issuer default rating to BB- from BB and affirmed the foreign-currency rating at BB-. The outlook for the FC IDR was revised to stable from positive, while the outlook for the LC IDR remains stable.

In conjunction with these rating actions, the agency affirmed the ratings of the senior secured and unsecured notes issued by Pan American Energy LLC Sucursal Argentina and Pan American Energy, SL, Argentine Branch which are guaranteed by Pan American Energy SL at BB-.

“The downgrade of the LC IDR to BB- from BB reflects lower than previously expected profit and output by the company's operations in Mexico, as well as the increased difficulty of the operating environment (OE) in Mexico due to the continued intervention in the sector by the Mexican government. The revision of the FC IDR outlook to stable from positive is due to the expectation that the country ceiling of Argentina will be the relevant anchor for the company's FC rating during the next 12 months, rather than Mexico, as previously forecast,” Fitch said in a press release.

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