Moody’s provides B3 to YPF notes

Moody's Investors Service said it assigned a B3 global foreign currency rating to YPF SA’s proposed up to CHF 300 million notes due 2019.

Proceeds will be used for capital expenditure and working capital purposes.

The outlook is stable.

Moody’s said the B3 rating is based on YPF's status as the largest industrial corporation and energy company in Argentina with sizeable oil and gas reserves, including large shale resources.

The ratings also incorporate the agency’s belief that although credit metrics will deteriorate during 2016, given the adverse operating environment, they will remain strong for the rating category.

Moody's said it will closely monitor the company's ability to adapt to the new environment, following the 12% decrease in local oil prices in Argentina earlier this year and still uncertain policies for the energy sector, on top of a rigid cost structure due to the Argentine labor dynamics that impact YPF's cash flow generation.

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