28 de marzo de 2014 / 15:25 / hace 4 años

Fitch Expects to Rate YPF's Proposed Debt Issuance of up to US$1B 'B-/RR4'

(The following statement was released by the rating agency) NEW YORK, March 28 (Fitch) Fitch Ratings expects to assign a rating of 'B-/RR4' to YPF S.A.'s (YPF) proposed senior unsecured debt issuance for up to US$1 billion with a 10-year maturity and amortizations in years eight (30%), nine (30%) and 10 (40%). The offering is expected to be at a minimum US$500 million but depending on market interest could climb up to US$1 billion. The proceeds will be used to fund fixed asset investments in Argentina and working capital requirements. The notes rank at least pari passu in priority of payment with all other YPF senior unsecured debt. The notes are rated the same as all senior unsecured obligations of YPF. The 'RR4' Recovery Rating (RR) for the company's senior unsecured notes outstanding reflects an average expected recovery given default and is in line with the RR soft cap established for Argentina. Key Rating Drivers YPF's ratings reflect its strong linkage with the credit quality of the Republic of Argentina (Fitch local and foreign currency Issuer Default Ratings 'B-', Outlook Negative, and 'CC', respectively) and the company's low reserve life. LINKAGE TO SOVEREIGN: YPF's ratings reflect the close linkage with the Republic of Argentina resulting from the company's ownership structure as well as recent government interventions. The Republic of Argentina controls the company through its 51% participation after it nationalized the company on April 2012. Following this action, the company's strategy and business decisions are governed by the Republic of Argentina. LOW HYDROCARBON RESERVE LIFE: The ratings consider the company's relatively weak operating metrics characterized by low reserve life and historically declining production levels, though the latter trend slightly improved during 2013. As of year-end 2013, YPF reported proved reserves of 1,083 million barrels of oil equivalent (boe) and average production of 517,000 boe per day. The company's average production in 2013 is up nearly 8% year-over-year. Despite the improvement seen in 2013, this translates into a reserve life of approximately 5.7 years and the company's reserve replacement ratio was approximately 81%. These figures are significantly below optimal levels and have the potential to create significant operational challenges in the medium to long term. STRONG BUSINESS POSITION: YPF benefits from a strong business position supported by its vertically integrated operations and dominant market presence in the Argentine hydrocarbons' market. Fitch anticipates that YPF will continue to exercise an active role in domestic fuel and gas supply. In addition, Fitch expects the company to continue to solidify its market leadership in Argentina and also increase its proved reserves via small to medium-sized acquisitions such as the February 2014 purchase of Apache Argentina which added 135 million boe in proved reserves. This acquisition increased the company's proved reserves by 12%. ADEQUATE CREDIT PROTECTION METRICS: YPF has relatively solid credit protection metrics, characterized by moderate leverage and a manageable debt amortization schedule. As of the year ended Dec. 31, 2013, total financial leverage, as measured by total debt-to-EBITDA, reached 1.2x, which is considered low for the assigned rating. As of year-end 2012, YPF's total debt-to-total proved reserves ratio was average at USD4.5 per boe. Total debt as of Dec. 31, 2013 amounted to approximately USD4.9 billion, of which approximately USD1.4 billion was short-term. Total cash and equivalents amounted to approximately USD1.6 billion as of Dec. 31, 2013. EBITDA for 2013 was approximately USD4.3 billion, which is up 24% on a year-on-year basis. During recent years, the company's leverage has been increasing, mostly as a result of increases in debt. The company's stated strategy is to maintain its net leverage below 1.5x, though Fitch expects leverage to increase beyond this level in the near to medium term given the company's ambitious 2013-2017 US$33 billion capex program. Rating Sensitivity YPF's ratings could be negatively affected by a combination of the following: a downgrade of the Republic of Argentina's ratings; a significant deterioration of credit metrics; and/or the adoption of adverse public policies that can affect the company's business performance in any of its business segments. A positive rating action in the short to medium term is considered unlikely given the linkage with sovereign credit quality and the Negative Outlook for all foreign and local currency IDRs. Contact: Primary Analyst Xavier Olave Associate Director +1-212-612-7895 Fitch Ratings, Inc. One State Street Plaza New York, NY 10004 Secondary Analyst Paula Garcia Director +562-2-4993316 Committee Chairperson Daniel Kastholm Managing Director +1-312-368-2070 Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email: elizabeth.fogerty@fitchratings.com. Additional information is available at 'www.fitchratings.com'. Applicable Criteria and Related Research: --'Corporate Rating Methodology' (Aug. 5, 2013). Applicable Criteria and Related Research: Corporate Rating Methodology: Including Short-Term Ratings and Parent and Subsidiary Linkage here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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