Ypf Sociedad Anonima 6-K, filed Jan 13, 2021
Ypf Sociedad Anonima (YPF)
About this 6-K
Ypf Sociedad Anonima filed this 6-K on January 13, 2021.
Table of Contents
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of January, 2021
Commission File Number: 001-12102
YPF Sociedad Anónima
(Exact name of registrant as specified in its charter)
Macacha Güemes 515
C1106BKK Buenos Aires, Argentina
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes ☐ No ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes ☐ No ☒
Table of Contents
YPF Sociedad Anónima
| ITEM | ||
| 1 | Translation of letter to the Buenos Aires Stock Exchange dated January 12, 2021. |
Table of Contents
Autonomous City of Buenos Aires, January 12, 2021
To the
Bolsa de Comercio de Buenos Aires
(Buenos Aires Stock Exchange)
Ref. Changes in the Rating of Negotiable Obligations
Dear Sirs:
In accordance with the requirements of the Argentine Securities Commission (the “CNV”) Rules, we inform you that, on January 11, 2021, S&P Global Ratings (“S&P”) modified YPF S.A.’s (“YPF”) issuer rating from “CCC-“ to “CC” and maintained its “CCC-“ international rating for YPF’s Senior Unsecured Negotiable Obligations Series LII, LIII and LIV issued under YPF’s Global Medium-Term Debt Securities Program for a maximum total principal amount outstanding at any time of US$10,000,000,000 (ten billion US Dollars) or its equivalent in other currencies (the “Program”) and for YPF’s Series I and Series XIII Unsecured Negotiable Obligations issued under the Simplified Frequent Issuer Regime.
Additionally, Fitch Ratings (“Fitch”) modified YPF’s long-term issuer default rating and the rating its Senior Unsecured Negotiable Obligations from “CCC” to “C”, both on an international scale.
Fitch’s rating modification includes the ratings for YPF’s Senior Unsecured Negotiable Obligations Series XLVII, XXVIII, XXXIX, LII, LIII and LIV, all of which were issued under the Program. Such modification also includes the rating for YPF’s Senior Unsecured Negotiable Obligations Series XIII issued under the Simplified Frequent Issuer Regime.
Further, on January 11, 2021, FIX SCR S.A. , an affiliate of Fitch, modified YPF’s domestic long term ratings from AA (arg) to CCC(arg) and its domestic short term ratings from “A1+(arg)” to “C(arg)”.
The reports issued by S&P and Fitch are attached as exhibits hereto. The FIX report is available in Spanish at: https://www.fixscr.com/reportes-web/view?id=42139.
Yours faithfully,
Santiago Wesenack
Market Relations Officer
YPF S.A.
Table of Contents
| Exhibit No. |
Description | |
| 99.1 | S&P Report dated January 11, 2021 | |
| 99.2 | Fitch Report dated January 8, 2021 | |
Table of Contents
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| YPF Sociedad Anónima | ||||||
| Date: January 12, 2021 | By: | /s/ Santiago Wesenack | ||||
| Name: | Santiago Wesenack | |||||
| Title: | Market Relations Officer | |||||
Exhibit 99.1
|
|
Research Update:
YPF S.A. Downgraded To ‘CC’ From ‘CCC-’ And Off CreditWatch Negative On Debt Exchange Proposal, Outlook Negative
January 11, 2021
| Rating Action Overview | PRIMARY CREDIT ANALYST | |||
| • Argentina-based integrated oil company YPF S.A. has just announced a proposed transaction that aims at refinancing most of its outstanding international bonds (due 2021, 2024, 2025, 2027, 2029, and 2047) and removing certain existing covenants. |
Diego H Ocampo
Buenos Aires (54) 114-891-2116 diego.ocampo @spglobal.com | |||
| • The company offered the transaction following the central bank’s September 2020 measure that limits the access to hard currency to Argentine issuers with debt maturities of more than $1 million until the end of March 2021. Such a limitation is unprecedented and impairs YPF’s ability to serve the outstanding portion of its 2021 bonds (about $413 million). |
SECONDARY CONTACT
Luisa Vilhena Sao Paulo + 55 11 3039 9727 luisa.vilhena @spglobal.com | |||
| • In such a scenario, YPF offers to exchange all of its foreign currency bonds for the following: the export-backed 8.5% 2026 bond, senior unsecured 8.5% 2029 bond, and the senior unsecured 7% 2033 bond. Although, in our view, this doesn’t compensate for the extension of tenors, we consider that only the holders of the 2021 bond face the risk of its default if they decide not to participate in the transaction. Therefore, we consider that exchange to be equivalent to a default -–we don’t rate the 2021 bonds, so the rating impact will be only at the issuer level. |
||||
| • On Jan. 11, 2021, S&P Global Ratings lowered its issuer rating on YPF to ‘CC’ from ‘CCC-’. We also expect to lower the issuer credit rating to selective default (SD) once the transaction is completed, and reassess the company’s credit quality 24 hours afterwards. We also removed ratings from CreditWatch with negative implications. |
||||
| • We view the offer for the rest of YPF’s bonds (other than for the 2021 bond) as opportunistic, given that the likelihood of YPF unable to serve them is sharply lower given that our assumption that transfer and convertibility (T&C) restrictions are momentary. |
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| www.spglobal.com/ratingsdirect | January 11, 2021 | 1 |
Research Update: YPF S.A. Downgraded To ‘CC’ From ‘CCC-’ And Off CreditWatch Negative On Debt Exchange Proposal, Outlook Negative
Rating Action Rationale
YPF is offering three new bonds (with final maturity in 2026, 2029, and 2033) in exchange for: the senior unsecured bonds maturing in March 2021, April 2024, March 2025, July 2025, July 2027, June 2029, and December 2047. Creditors of the 2021 bond can opt to receive $12.5 in cash, plus accrued interest payments on it at the settlement and $87.5 in a new export-backed security that amortizes between 2023 to 2026, for each $100 tendered. The new 2026 secured bond has an 8.5% interest payable along with the principal from 2023 to 2026 and capitalizes the accrued interests from 2021 to 2022.
Bondholders of the rest of the existing bonds can opt to exchange them for a pre-defined combination of the new bonds, which would entail in most of the cases an extension of the tenors of their holdings while keeping the same interest (8.5%) or getting a lower one (7%), particularly for the holders of the bonds that mature beyond July 2025.
We typically consider an exchange as tantamount to default due to the following factors: there’s a likelihood of a conventional default if the exchange is not completed, and it doesn’t provide sufficient compensation for the extension of the tenors. In our opinion, both conditions are met for the holders of the 2021 bond, but the first condition doesn’t necessarily apply to the rest of the bonds offered.
YPF’s capacity to pay the outstanding 2021 bond ($413 million) is doubtful. This is because despite the sufficient amount in Argentine pesos, the company won’t be able to convert them to dollars to make the payment, given that Argentina’s central bank has stated that it will only supply dollars for only 40% of the principal maturities coming due until March 31, 2021. Therefore, YPF would fall short about $250 million for that maturity.
In September 2020, the central bank restricted access to foreign currency for domestic companies and residents given that the country’s international reserves were falling rapidly due to the very weak economy prior to the pandemic, exacerbated by the lockdown. We estimate that Argentina’s GDP contracted 11%-12% in 2020. Given the central bank’s measure, companies are forced to refinance 60% of the principal of debt maturities coming due prior to March 31, 2021.
Although Argentina could extend capital controls beyond March 2021 as the country steadies its foreign accounts, we view the restriction as temporary. Therefore, the company’s payments of bonds and principal amortizations in the medium and long term shouldn’t be affected, in our view.
We also expect YPF’s oil and gas volumes to continue normalizing, while the company increased pump prices five times in the past five months, after a price freeze for most of the first half of 2020.
To protect cash, the company squeezed the cash cycle and slashed capital expenditures (capex) to $2 billion in the past 12 months as of September 2020 from $3.5 billion in 2019. The peso’s sharp depreciation also contributed to YPF’s lower capex and costs. In 2020, YPF’s external financing has come mostly from bank debt refinancing and the domestic market where the company issued over $500 million (the bonds are paid in pesos, but the nature of the obligation is in dollars). Due to these factors, YPF’s cash reserves were near $1 billion as of Sept. 30, 2020, though they’re mostly in pesos in Argentina.
Outlook
The negative outlook on YPF reflects its potential downgrade to ‘SD’ at the closing of the transaction. Once the exchange is completed, we expect to raise the ratings to the ‘CCC’ category assuming no sharp reduction in Argentina’s T&C risks.
Except for the 2021 bond that we don’t rate, we will keep the ratings on the rest of the bonds at ‘CCC-’ until we reassess the company’s credit quality following the exchange. At that time, we will also assess any subordination impact on those ratings if necessary.
| www.spglobal.com/ratingsdirect | January 11, 2021 | 2 |
Research Update: YPF S.A. Downgraded To ‘CC’ From ‘CCC-’ And Off CreditWatch Negative On Debt Exchange Proposal, Outlook Negative
Related Criteria
| • | General Criteria: Group Rating Methodology, July 1, 2019 |
| • | Criteria | Corporates | General: Corporate Methodology: Ratios And Adjustments, April 1, 2019 |
| • | Criteria | Corporates | General: Reflecting Subordination Risk In Corporate Issue Ratings, March 28, 2018 |
| • | General Criteria: Rating Government-Related Entities: Methodology And Assumptions, March 25, 2015 |
| • | Criteria | Corporates | General: Methodology And Assumptions: Liquidity Descriptors For Global Corporate Issuers, Dec. 16, 2014 |
| • | General Criteria: Country Risk Assessment Methodology And Assumptions, Nov. 19, 2013 |
| • | Criteria | Corporates | General: Corporate Methodology, Nov. 19, 2013 |
| • | General Criteria: Methodology: Industry Risk, Nov. 19, 2013 |
| • | General Criteria: Ratings Above The Sovereign—Corporate And Government Ratings: Methodology And Assumptions, Nov. 19, 2013 |
| • | General Criteria: Methodology: Management And Governance Credit Factors For Corporate Entities, Nov. 13, 2012 |
| • | General Criteria: Criteria For Assigning ‘CCC+’, ‘CCC’, ‘CCC-’, And ‘CC’ Ratings, Oct. 1, 2012 |
| • | General Criteria: Principles Of Credit Ratings, Feb. 16, 2011 |
| • | General Criteria: Stand-Alone Credit Profiles: One Component Of A Rating, Oct. 1, 2010 |
Related Research
| • | Various Rating Actions Taken On Argentine Companies Following Tightened Regulations On Accessing Foreign Exchange, Sept. 18, 2020 |
Ratings List
| Downgraded; CreditWatch/Outlook Action |
||||
| To | From | |||
| YPF S.A. |
||||
| Issuer Credit Rating |
CC/Negative/— | CCC-/Watch Neg/— | ||
| Ratings Affirmed; CreditWatch/Outlook Action |
||||
| To | From | |||
| YPF S.A. |
||||
| Senior Unsecured |
CCC- | CCC-/Watch Neg | ||
| www.spglobal.com/ratingsdirect | January 11, 2021 | 3 |
Research Update: YPF S.A. Downgraded To ‘CC’ From ‘CCC-’ And Off CreditWatch Negative On Debt Exchange Proposal, Outlook Negative
Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on S&P Global Ratings’ public website at www.standardandpoors.com. Use the Ratings search box located in the left column.
| www.spglobal.com/ratingsdirect | January 11, 2021 | 4 |
Research Update: YPF S.A. Downgraded To ‘CC’ From ‘CCC-’ And Off CreditWatch Negative On Debt Exchange Proposal, Outlook Negative
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| www.spglobal.com/ratingsdirect | January 11, 2021 5 |
Exhibit 99.2
| 1/11/2021 | Fitch Downgrades YPF S.A. to ‘C’ on Proposed Exchange Offer |
RATING ACTION COMMENTARY
Fitch Downgrades YPF S.A. to ‘C’ on Proposed Exchange Offer
Fri 08 Jan, 2021-4:20 PM ET
Fitch Ratings-New York-08 Jan 2021: Fitch Ratings has downgraded YPF S.A.’s (YPF) Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to ‘C’ from ‘CCC’. In addition, Fitch has downgraded YPF’s outstanding senior unsecured notes to ‘C’/‘RR4’ from ‘CCC’/‘RR4’, and stand-alone credit profile to ‘c’ from ‘bb’.
The downgrades reflect Fitch’s view that the announced exchange offer and consent solicitation of YPF’s seven outstanding international bonds totaling $6.2 billion represent a Distressed Debt Exchange, per Fitch’s criteria. Fitch views the offer as a material reduction of the original terms due to the proposed exit consent level, decrease in coupons for the outstanding 2024 and 2029 notes post-exchange, and a grace period for interest payment of two years.
Fitch sees the exchange offer as being expedited by the Central Bank of Argentina’s refusal to allow YPF to access the local FX market to settle the outstanding $413 million of its previous $1.0 billion outstanding March 23, 2021 bond, which was not exchanged in July of 2020.
As a result, YPF has announced a multi-tranche exchange offering. Fitch understands that all bondholders of YPF’s outstanding 2021,2024,2025,2027,2029 and 2047 international bonds have been offered different two-part offer in the early participation offer, which expires on Jan. 21, 2021. In all cases, the bondholders have been offered a portion of the new 8.5% senior secured export backed notes due 2026.
| https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-ypf-sa-to-c-on-proposed-exchange-offer-08-01-2021 | 1/11 |
| 1/11/2021 | Fitch Downgrades YPF S.A. to ‘C’ on Proposed Exchange Offer |
In addition, bondholders of the 8.5% notes due March 2021 have been offered a $157 cash payment option. Bondholders of the 8.75% notes due 2024 have been offered the new 8.5% notes due 2029. The March 2025 bondholders have been offered the new 8.5% notes due 2029 bonds. Bondholders of the 8.5% notes due July 2025 have been offered both the new 8.5% notes due 2029 and 7.0% notes due 2033. Finally, bondholders of the 6.95% notes due 2027,8.5% notes due 2029, and 7.0% notes due 2047 bond holders have been offered the new 7.0% notes due 2033
In the late exchange consideration, which expires on Feb. 4, 2021, bondholders of the 8.5% notes due 2021 will be offered the 8.5% export backed notes due 2026, without a cash payment. Bondholders of the 2024 and March 2025 notes have been offered only the 8.5% notes due 2029. Bondholders of the 2025 notes have been offered both the new 8.5% notes due 2029 and the new 7.0% notes due 2033. Finally, the bondholders of the 6.95% notes due 2027, 8.5% notes due 2029 and 7.0% notes due 2047 are offered the new 7.0% notes due 2033.
Fitch understands that all three post-exchange bonds will have a two-year grace period on interest; after which, interest will be paid quarterly and the notes will begin amortizing in four equal instalments four years from their respective maturities. The consent solicitation also proposes stripping non-participating noteholders of their existing covenants (i.e. restrictive covenants and certain events of default) of all the notes indentures. The proposed amendments require the affirmative vote of a majority holders of at least 60% of the outstanding aggregate principal amount.
In the absence of an affirmative majority vote, a second notice will define the eligible bondholders that represent a majority of at least 30% as quorum. Fitch views this proposed exchange offer as coercive, and is a material reduction in the terms that dilutes the bonds holders’ original rights.
KEY RATING DRIVERS
Exchange Offer Qualifies as DDE: The exchange offer, if agreed upon, will consist of a DDE under Fitch’s criteria, as existing bondholders face a material reduction in terms and conditions. Fitch views this exchange as being exacerbated by the Argentine central bank’s denial of YPF’s request to access the local FX market to repay the outstanding principal of its 2021 international notes.
The announced exchange offering is further incentivized by YPF’s investment needs required by the new plan gas 4. Fitch’s forecasted FFO levels for YPF are not sufficient to service debt and simultaneously invest the appropriate capex levels required by plan gas 4. Accordingly, the company is looking to allocate the average annual interest expense payments of around $900 million to capex by requesting the two year interest payment grace period as part of the exchange.
| https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-ypf-sa-to-c-on-proposed-exchange-offer-08-01-2021 | 2/11 |
| 1/11/2021 | Fitch Downgrades YPF S.A. to ‘C’ on Proposed Exchange Offer |
Links to Sovereign: YPF has a close linkage to the Republic of Argentina from the company’s ownership structure as well as recent government interventions. Argentina controls the company through its 51% stake, the presence of provincial government officials on the board of directors and various regulations. In addition, the republic sometimes governs the company’s strategy and business decisions.
The Argentine government has a history of significant interference in the oil and gas sector. For example, via Decree No. 1277, the government set regulations related to investment levels in the oil and gas sector and domestic price reference points. In 2019, it issued Decree 566/19, which negatively affected YPF’s cash flows. Although YPF is a leading energy company in Argentina, government policies continue to present challenges, inhibiting its business strategy.
Volatile Operating Environment: The volatile economic environment in Argentina has inhibited YPF from implementing its business strategy, i.e. unconventional development in Vaca Muerta. Pandemic quarantine orders have further stressed the company, as demand for fuels has decreased. Gasoline volumes dropped by 70% and diesel by 34%, jet fuel 95%, with a total demand decrease of 50% in April 2020, compared with the previous year. Volumes appear to have recovered but remain below historical averages.
Fitch estimates Argentina’s real GDP will contract by 11.2% in 2020, after negative average growth rate over the last three years. Inflation is expected to average 47% between 2020 and 2022, and government debt/GDP ratio is estimated to be 102% in 2020 and 105% in 2021, with a majority of government debt being external 75%-80% over the same time frame.
YPF has an ESG Relevance Score of ‘4’ for Governance Structure due to Argentina federal government’s majority ownership in YPF, which has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors.
| https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-ypf-sa-to-c-on-proposed-exchange-offer-08-01-2021 | 3/11 |
| 1/11/2021 | Fitch Downgrades YPF S.A. to ‘C’ on Proposed Exchange Offer |
DERIVATION SUMMARY
YPF’s linkage to the sovereign is similar in nature to its Latin American national oil companies (NOCs) peers, namely PEMEX (BB-/Stable), Petrobras (BB-/Negative) and Ecopetrol (BBB-/Negative), and government-owned entities ENAP (A-/Stable), and Petroperu (BBB+/Negative). These companies all have strong linkage to their respective sovereigns given their strategic importance to each country and the potentially significant negative social and financial implication a default could have at a national level.
YPF’s upstream business closest peers are Pemex, Petrobras and Ecopetrol. YPF’s total production averaged 514,000boed, and the reserve life was 5.7 years, most comparable with Ecopetrol with a 2019 production of 725,000boed and a reserve life of 7.8 years, but less than Petrobras’ production of 2.6 million boed and a reserve life of 10 years and Pemex’s production at 2.8 million boed and a reserve life of 9.5 years.
Unlike its peers ENAP, Petrobras, Pemex and Petroperu, YPF is not the sole provider of refined fuels in Argentina. In 2019, the company had nearly a 60% market share. YPF is an integrated energy company, similar to Petrobras and Pemex, offering the company more financial flexibility, while ENAP is predominately a refining company that sells to marketers.
Historically, YPF has operated autonomously with periodic controls of fuel prices and crude, which are currently in effect. Similar to Pemex and Petrobras, YPF has administered an import-parity pricing policy, but is evidence of government intervention with Decree 466/19 and other price controls in 2018 to tame inflation, which is projected to be 50% in 2020. Until recently, YPF has had success in tightening the spread between import parity and local prices.
When compared with downstream-focused entities ENAP and Petroperu, YPF has a lower total debt/EBITDA ratio of 2.4x in 2019 compared with ENAP at 6.7x and Petroperu at 18.0x. Petroperu’s elevated leverage is explained by its investment plan to increase capacity by 2021, while ENAP has maintained a higher leverage profile for an extended period of time, but the company is highly strategic for the Chilean governments, and thus it rating is aligned as a result.
KEY ASSUMPTIONS
-Average gross production of 515,000boe from 2020-2023;
-YPF will be able to increase domestic prices in pesos somewhat but not enough to fully reflect the impact from the recent peso depreciation and international hydrocarbon price increase;
| https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-ypf-sa-to-c-on-proposed-exchange-offer-08-01-2021 | 4/11 |
| 1/11/2021 | Fitch Downgrades YPF S.A. to ‘C’ on Proposed Exchange Offer |
-Criollo barrel of USD45/bbl in place for 2020 and applied Fitch’s price deck thereafter;
-Natural gas prices decrease to USD2.70/MMBTU in 2020, USD3.00/MMBTU in 2021, USD3.25/MMBTU in 2022 and USD3.57/MMBTU in 2023;
-Capex cut to be FCF positive over the rated horizon due to refinancing risk;
-Downstream sales volume follow Real GDP forecasts;
-USD111 million of net proceeds associated with the sale of 11% stake in Bandurria Sur to Equinor and Shell; and a 50% stake in offshore area CAN_100 to Equinor in 2Q20;
-Fitch ARS/USD forecasts for year average and end of period during 2020-2022;
-Refinancing of all maturing debt during the rated horizon at a rate of 10%.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive rating action/upgrade:
-The IDR would be simultaneously upgraded to a rating level reflecting the post-DDE credit profile, which will be capped at ‘CCC’ in line with the Country Ceiling of Argentina.
Factors that could, individually or collectively, lead to negative rating action/downgrade:
-Completion of the proposed exchange offer would lead to a downgrade of the Long-term IDRs to ‘RD’
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from ‘AAA’ to ‘D’. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.
| https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-ypf-sa-to-c-on-proposed-exchange-offer-08-01-2021 | 5/11 |
| 1/11/2021 | Fitch Downgrades YPF S.A. to ‘C’ on Proposed Exchange Offer |
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: YPF reported USD1.3 billion in cash and cash equivalents in 3Q20. Per Fitch’s estimates, this covers roughly one year of interest expense. The company’s debt maturity profile did improve after the completion of its exchange offer for its USD1.0 billion international note due 2021, where the company received nearly a 60% acceptance of the offer.
However, the central bank of Argentina (BCRA) denial to permit YPF to access the official FX market to settle its outstanding principal of $413 million has exacerbated the company to launch its liability management exercise for all its outstanding international bonds. If the exchange is successful in extending maturities and delay interest payments, Fitch estimates the cash flow profile will improve, but liquidity will remain neutral as YPF will allocate cash to capex to invest in unconventional development.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG CONSIDERATIONS
YPF has an ESG Relevance Score of ‘4’ for Governance Structure due to Argentina federal government’s majority ownership in YPF, which has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of ‘3’. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch’s ESG Relevance Scores, visit www.fitchratings.com/esg
| https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-ypf-sa-to-c-on-proposed-exchange-offer-08-01-2021 | 6/11 |
| 1/11/2021 | Fitch Downgrades YPF S.A. to ‘C’ on Proposed Exchange Offer |
RATING ACTIONS
| ENTITY/DEBT |
RATING |
|
RECOVERY |
PRIOR | ||||||
| YPF S.A. |
LT IDR | C | Downgrade | ccc | ||||||
| LC LT IDR | C | Downgrade | ccc | |||||||
| • senior unsecured |
LT | C | Downgrade | RR4 | ccc | |||||
VIEW ADDITIONAL RATING DETAILS
FITCH RATINGS ANALYSTS
Saverio Minervini
Director
Primary Rating Analyst
+1 212 908 0364
Fitch Ratings, Inc.
Hearst Tower 300 W. 57th Street New York, NY 10019
Jose Ramon Rio
Associate Director
Secondary Rating Analyst
+56 2 2499 3316
Jay Djemal
Senior Director
Committee Chairperson
+1 312 368 3134
MEDIA CONTACTS
Elizabeth Fogerty
New York
+1 212 908 0526
elizabeth.fogerty@thefitchgroup.com
Additional information is available on www.fitchratings.com
| https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-ypf-sa-to-c-on-proposed-exchange-offer-08-01-2021 | 7/11 |
| 1/11/2021 | Fitch Downgrades YPF S.A. to ‘C’ on Proposed Exchange Offer |
APPLICABLE CRITERIA
Distressed Debt Exchange Rating Criteria (pub. 06 Aug 2019)
Government-Related Entities Rating Criteria (pub. 30 Sep 2020)
Corporate Rating Criteria (pub. 21 Dec 2020) (including rating assumption sensitivity)
Country-Specific Treatment of Recovery Ratings Criteria (pub. 05 Jan 2021)
APPLICABLE MODELS
Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s).
Corporate Monitoring & Forecasting Model (COMFORT Model), v7.9.0 (1)
ADDITIONAL DISCLOSURES
Dodd-Frank Rating Information Disclosure Form
Solicitation Status
Endorsement Policy
ENDORSEMENT STATUS
YPF S.A. EU Endorsed, UK Endorsed
DISCLAIMER
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| https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-ypf-sa-to-c-on-proposed-exchange-offer-08-01-2021 | 8/11 |
| 1/11/2021 | Fitch Downgrades YPF S.A. to ‘C’ on Proposed Exchange Offer |
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COPYRIGHT
Copyright © 2020 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed.
| https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-ypf-sa-to-c-on-proposed-exchange-offer-08-01-2021 | 9/11 |
| 1/11/2021 | Fitch Downgrades YPF S.A. to ‘C’ on Proposed Exchange Offer |
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| https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-ypf-sa-to-c-on-proposed-exchange-offer-08-01-2021 | 10/11 |
| 1/11/2021 | Fitch Downgrades YPF S.A. to ‘C’ on Proposed Exchange Offer |
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SOLICITATION STATUS
The ratings above were solicited and assigned or maintained at the request of the rated entity/issuer or a related third party. Any exceptions follow below.
ENDORSEMENT POLICY
Fitch’s international credit ratings produced outside the EU or the UK, as the case may be, are endorsed for use by regulated entities within the EU or the UK, respectively, for regulatory purposes, pursuant to the terms of the EU CRA Regulation or the UK Credit Rating Agencies (Amendment etc.) (EU Exit) Regulations 2019, as the case may be. Fitch’s approach to endorsement in the EU and the UK can be found on Fitch’s Regulatory Affairs page on Fitch’s website. The endorsement status of international credit ratings is provided within the entity summary page for each rated entity and in the transaction detail pages for structured finance transactions on the Fitch website. These disclosures are updated on a daily basis.
Energy and Natural Resources Corporate Finance: Middle Markets Corporate Finance
Corporate Finance: Leveraged Finance Latin America Argentina
| https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-ypf-sa-to-c-on-proposed-exchange-offer-08-01-2021 | 11/11 |