Fitch rates YPF notes B-

Fitch Ratings said it expects to assign a B- rating with a recovery rating of RR4 to YPF SA's proposed secured debt issuance for up to $150 million.

The proceeds will be used to refinance existing debt and to fund capital investments for developing natural gas production in the province of Neuquen.

The notes will rank pari passu in security of payment with all other of YPF's senior unsecured debt and will benefit from a first-priority security interest in a six-month debt service reserve account, Fitch said.

The debt-service account will be held offshore and funded with flows from YPF's agro exports in order to help the company access foreign-currency to service its debt, the agency said.

The collateral account will receive about $400 million per year of flows from YPF's agro exports to four international grain-trading companies, Fitch said.

While positive, the credit enhancement of the transaction's structure is not sufficient to merit a rating uplift given the short track record of YPF's agro exports and the short-term nature of sale contracts with traders, the agency said.

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