RPT-Fitch Revises Repsol's Outlook to Positive; Affirms at 'BBB-'
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April 14 (Reuters) - (The following statement was released by the rating agency)
Fitch Ratings has revised Repsol SA's Outlook to Positive from Stable and affirmed its Long-term Issuer Default Rating (IDR) at 'BBB-'. A full list of rating actions is provided below.
The Outlook change reflects Fitch's expectations that the company will soon receive up to USD6bn in nominal value of guaranteed Argentine government bonds as compensation for the expropriation of 51% of former subsidiary YPF (B-/Negative) and YPF Gas. This follows an agreement reached with the government of Argentina in February 2014.
We also expect Repsol will monetise these bonds within the next two years. The ratings will be upgraded after bonds equal to USD3bn are sold because of the material improvement to the company's liquidity and net leverage metrics. Further upgrades to 'BBB+' will depend on use of proceeds to fund acquisitions, capital investments or reduce debt.
KEY RATING DRIVERS
Tangible YPF Compensation
Fitch will upgrade Repsol's Long-term IDR to 'BBB' once the company monetises at least USD3bn of its guaranteed Argentine government bonds. Repsol's agreement with Argentina removes much of the cash flow uncertainty we had indicated in our December 2013 rating affirmation. Continuación...