S&P downgrades YPF to SD

S&P said it lowered its issuer credit rating on YPF SA to SD from CC.

On Feb. 11, YPF announced that 59.79% of the bondholders of its outstanding $413 million 8˝% senior unsecured notes due March 23, 2021, accepted an exchange offer, which the company made on Jan. 7.

“We consider the exchange offer of the 2021 bonds as distressed because we believe there's a realistic probability of a conventional default, given the transfer and convertibility (T&C) restrictions that Argentina's central bank imposed,” S&P said in a news release.

“Also, because of the multiple risks YPF faces in Argentina, the analysis of the compensation package the company offered to bondholders looks imbalanced in the short to medium term, though it relieves YPF's cash flows.”

S&P noted that the bonds S&P rates, other than the 2021 bond, remain at CCC-.

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