S&P affirms YPF

Standard & Poor's said it affirmed the BB+ local-currency corporate credit rating on YPF SA and removed it from CreditWatch with negative implications where it was placed Dec. 27.

The outlook is stable.

According to S&P, the local-currency ratings were placed on CreditWatch negative following shareholder Repsol-YPF SA's (BBB/stable/A-2) announcement that it would sell a stake in the company, potentially signaling a decrease in parent support and a less-flexible dividend policy in a context of strong capital expenditure needs.

In February, Repsol sold a 14.9% stake in YPF to Grupo Petersen for $2.2 billion. Petersen will have an option to purchase an additional 10.1% in the next four years.

Ratings reflect the challenges of operating in the highly uncertain and rapidly changing Argentine economic and regulatory environment, a geographically concentrated reserve base, very weak reserve-replacement ratios and an aggressive dividend policy, the agency said.

Those factors are partially offset by moderate debt levels, the company's vertical integration of its operating units, its dominant market position in Argentina and a certain degree of potential support from Repsol, S&P said.

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