Moody's may lower YPF

Moody's Investors Service said it placed under review for downgrade YPF SA's Baa2 global local currency rating and the Ba2 foreign currency bond rating for its $225 million of bonds due in February.

Moody's said that the outlook for the global rating has been negative.

The review for downgrade is prompted by deteriorating economic conditions in Argentina and the decline in global commodity markets, and by concerns that higher government revenue needs and an unpredictable government policy framework could lead to tax and regulatory changes that will in turn put pressure on the company's financial profile and operating performance, the agency noted.

In addition, Moody's said it will assess whether the global rating should be maintained at a level that pierces Argentina's Ba1 global local currency ceiling, given current conditions in Argentina and a view that Repsol YPF SA, which is a major potential source of external support to YPF, is pursuing a longer-term strategy to reduce its ownership in and exposure to YPF.

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