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Fitch downgrades Argentine oil companies following Central bank dollar move

Saturday, October 29th 2011 - 03:35 UTC
Full article 3 comments
Oil and mining companies must sell their export dollars in the local money market Oil and mining companies must sell their export dollars in the local money market

Fitch Ratings has downgraded Argentine oil companies YPF and Pan American Energy foreign (PAE) currency Issuer Default Rating (IDR) to 'B+' from 'BB-' and has affirmed their local currency IDR at 'BB'.

The announcement came after the Argentine Central Bank has ordered oil, gas and mining companies to cash in all their export revenue on the local foreign-exchange market on Wednesday, moving strongly to protect dwindling central bank reserves as capital flight surges.

“YPF and PAE foreign currency rating downgrade reflect a greater degree of exposure to transfer and convertibility risk as a result of the recent change in regulation that obliges oil and gas producers to reimburse and liquidate 100% of export revenues,” said Fitch in a statement.

“This change in regulation highlights an increased intervention of the government in the oil and gas sector and the potential for foreign currency controls,” stated the rating agency.

YPF is controlled by Repsol YPF which is rated 'BBB+' by Fitch. PAE is currently 40% owned by Bridas Corporation (Bridas) which is in the process of acquiring BP's (rated 'A' by Fitch) remaining 60% stake in the company.

Bridas is 50% owned by Bridas Energy Holdings Ltd (BEH) and 50% by China National Offshore Oil Corporation Limited (CNOOC, rated 'A' by Fitch).

Categories: Economy, Argentina.

Top Comments

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  • geo

    wo will gave the rating to Fitch/other agencies....??

    Oct 29th, 2011 - 09:16 am 0
  • GeoffWard2

    Argentine oil companies YPF and Pan American Energy foreign (PAE) :

    Junk bond level (BB-) becomes even more junk bond level (B+).

    Don't know much about this, but it sounds bad.
    Anybody able to help?

    Oct 29th, 2011 - 02:30 pm 0
  • Pirat-Hunter

    I guess this companyes couldn't hide the true balue of their portfolio's, corruption is deep inside this culture and it seems that regulations weeds them out, maybe even rockhoper looking to theft oil in Malvinas Argentina are fixing their financial sheets to attract suckers. this companyes don't seem too bothered with brits thefting oil wealth from Argentina, I have a message for them, if it gets tough in Argentina you are all welcome to go back to wherever you feel better and there is someone who gives a damn.

    Oct 30th, 2011 - 12:40 am 0
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