SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

Rating agency Fitch upgraded YPF’s long-term rating to CCC after YPF struck a deal last week to swap $2.1bn in international bonds. Fitch estimated that YPF will pay an average of $700mn in interest per year through 2023. In the exchange, YPF issued:

  • $775mn in 2026s with a coupon of 4% through December 2022 and 9% thereafter with a quarterly amortization payment made equally beginning in 2023
  • $748mn in 2029s with a coupon of 2.5% through December 2022 and 9% thereafter with equal semi-annual amortization payments beginning in 2026
  • $576mn in 2033s with a coupon of 1.5% until the end of 2022 and 7% thereafter with annual amortization beginning 2029.

YPF will save ~$105mn annually on interest costs till end-2022 as per Fitch estimates, which the rating agency expects the company to use towards upstream capex to ramp up production “by up to  40,000boed, when assuming that unconventional wells average cost is $5.5 million in Vaca Muerta and each new well produces on average 1,000boed.” YPF’s 8.5% 2025s and 6.95% 2027s traded stable at 88.33 and 67.5 respectively.

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