Fitch cuts then ups YPF

Fitch Ratings said it downgraded YPF SA’s long-term foreign- and local-currency issuer default ratings to RD from C, due to the conclusion of its exchange offer. Fitch simultaneously upgraded YPF’s long-term local- and foreign-currency IDRs to CCC from RD, and upgraded the company’s senior unsecured notes to CCC/RR4 from C/RR4.

“The downgrade and simultaneous upgrade reflect the completion of the announced exchange for its seven outstanding international bonds totaling $6.2 billion notes. Per Fitch’s ‘Distressed Debt Exchange Criteria,’ the IDRs are downgraded to RD upon completion and re-rated as the exchange resulted in a material reduction in the original terms of the bonds, evidenced by the extension of maturities and discounted coupon payment for two-years from issuance of the new notes,” Fitch said in a press release.

Fitch said it estimates the exchange will save YPF about $105 million in interest expense annually through the end of 2022. Fitch expects YPF to allocate the savings to upstream capital expenditures to ramp up production, increasing production by up to 40,000 barrels of oil equivalent per day.

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