Fitch rates YPF notes B

Fitch Ratings said it expects to assign a rating of B with recovery rating of RR4 to YPF SA's proposed senior unsecured bond issuance of $300 million senior unsecured notes due 2022.

The notes will be denominated in Argentine pesos, payable in U.S. dollars and will carry a fixed rate, Fitch said.

The proceeds will be used to refinance existing debt and to fund fixed asset investments in Argentina and working capital requirements, the agency said.

The notes will rank at least pari passu in priority of payment with all other YPF senior unsecured debt, Fitch said.

The notes would be rated the same as all of YPF's senior unsecured obligations, the agency said.

The ratings reflect the company's strong linkage with the credit quality of the Republic of Argentina and the company's relatively low reserve life, Fitch said.

YPF's B ratings are linked to the sovereign rating of Argentina, which has a country ceiling of B. That limits the foreign-currency rating of most Argentine corporations, the agency explained.

The RR4 recovery rating on the company's senior unsecured notes outstanding reflects an average expected recovery given default and is in line with the recovery soft cap established for Argentine companies, Fitch said.

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