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You are here: Home News Spanish News S&P downgrades Argentina's outlook after YPF deal
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24/04/2012S&P downgrades Argentina's outlook after YPF deal

Standard & Poor's on Monday downgraded its credit rating outlook for Argentina from stable to negative, after Buenos Aires seized control of the country's largest oil company YPF.

"In our view, the recent government policies could increase risks to Argentina's macroeconomic framework, squeeze its external liquidity, and hinder medium-term growth prospects," the ratings agency said in a statement.

As such "we revised the outlook on the Republic of Argentina to negative from stable," they added.

S&P said the decision stemmed from policies implemented since President Cristina Kirchner was re-elected late last year.

"These include rising restrictions to international trade and recent steps to nationalize the hydrocarbon company Yacimientos Petroliferos Fiscales (YPF)," S&P added.

The agency affirmed Argentina's credit ratings at B. It said the negative outlook indicates at least a one-in-three chance of a downgrade this year or next.

Argentina declared YPF a public utility on April 16, allowing the government to seize a 51 percent stake. Later the same week it extended the move to YPF Gas, a separate company 85 percent owned by a division of Spain's Repsol.

Kirchner has argued that the expropriation was justified because YPF crude production had dropped while oil and gas imports doubled in 2011. Imports are forecast to triple by the end of the year.

Spain and the European Union have warned that the move by Buenos Aires would damage relations, and others have voiced concerns of a chilling effect on capital investment in the region.

World Bank head Robert Zoellick also has slammed Argentina's move.



© 2012 AFP


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