LatinNews Daily - 03 July 2020

* Argentina’s state-owned oil company Yacimientos Petrolíferos Fiscales (YPF) has announced that it is seeking to swap US$1bn in dollar-denominated bonds due in March 2021, for new instruments maturing in 2025 plus a cash payment. In a statement, YPF said the new bonds would retain the current 8.5% coupon rate, and amortisation payments would begin in 2022. The refinancing effort comes at a crucial moment in the Argentine government’s attempts to renegotiate some US$66bn of its sovereign debt held by foreign bondholders, and follows historic drops in global oil and gas prices brought on by the coronavirus (Covid-19) pandemic. Following the announcement, international credit ratings agency Fitch Ratings assigned a ‘CCC’ rating to the exchange bonds, representing its view that “the transaction does not constitute a material reduction in the original terms of the transaction”, but that “default is a real possibility.”

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