Fitch downgrades YPF

Fitch Ratings said it downgraded YPF SA’s long-term foreign- and local-currency issuer default ratings to C from CCC. Also, Fitch lowered YPF’s outstanding senior unsecured notes to C/RR4 from CCC/RR4.

The downgrades reflect Fitch’s view YPF’s planned exchange offer and consent solicitation of seven outstanding international bonds totaling $6.2 billion represent a distressed debt exchange, the agency said.

“Fitch views the offer as a material reduction of the original terms due to the proposed exit consent level, decrease in coupons for the outstanding 2024 and 2029 notes post-exchange, and a grace period for interest payment of two years,” the agency said in a press release.

Fitch said it sees the exchange as being expedited by the Argentine central bank’s refusal to let YPF access the local foreign-exchange market to settle the outstanding $413 million of its previous $1 billion outstanding March 23, 2021 bond, which was not exchanged in July.

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