YPF raises $1.2bn in international debt issue at lowest rate in company history after S&P lifts forecasts but keeps rating capped

Argentine oil producer YPF has raised $1.2bn through a nine-year international bond issue at an effective interest rate of 7.85%, the lowest borrowing rate in the company’s history. This comes as the company seeks to finance investments in the Vaca Muerta shale play and expand hydrocarbon production, La Nación reported.

The bonds were issued at a spread of 300 basis points over US Department of the Treasury securities, according to YPF’s president, Horacio Marín, who said the transaction marked the strongest pricing the company had achieved in international markets.

“This is a huge signal of the confidence the market has in our company, our present and the future we are building,” Marín said in a post on X.

Investor demand reached $2.2bn, almost twice the amount YPF ultimately issued. The company said the strong interest followed two days of meetings with more than 50 international investors in New York.

Marín said the transaction was the largest international debt issuance by an Argentine company in 11 years. The proceeds will be used to support YPF’s investment programme, particularly the development of Vaca Muerta and higher oil and gas production.

YPF said part of the funds would be used to prepay two international bonds maturing between 2027 and 2029. The remaining proceeds will finance the company’s growth strategy under the company’s Plan 4x4.

“Through this transaction, YPF improves its debt maturity profile and extends its average debt life,” the company said.

YPF’s latest financing comes as it seeks to extend maturities and strengthen its financial position while expanding production from Argentina’s largest unconventional oil and gas formation.

International banks BBVA, Itaú, JPMorgan, Santander and Balanz acted as placement agents for the issue. In Argentina, Galicia, Macro, CMF, Cucchiara, Latin Securities, Cocos and Puente Hermanos handled the local placement, YPF said.

This came after S&P Global Ratings raised its financial projections for the oil producer but kept its rating constrained by the country’s transfer and convertibility risk, Bloomberg Línea reported.

S&P assigned a “B” rating to YPF’s new bonds, one notch below the company’s standalone credit profile of “B+”. The agency said the difference reflected Argentina’s continued risk of restrictions or difficulties affecting companies’ access to foreign currency and their ability to transfer funds abroad.

Although S&P considers that this risk has declined, it said Argentina continues to face persistent economic imbalances and fragile external liquidity that remains vulnerable to shocks.

S&P highlighted YPF’s position as Argentina’s leading energy company, with integrated oil and gas operations and leading positions in the country’s upstream and downstream segments. It also pointed to the company’s relatively low leverage as a credit strength.

Those advantages are partly offset by YPF’s exposure to Argentina’s weak economic environment and its ambitious investment programme to support the rapid expansion of unconventional production and related midstream infrastructure.

The ratings agency also upgraded its financial outlook for YPF, citing higher international oil prices and stronger refining margins, or crack spreads, driven by “disruptions in the Middle East”. It now expects adjusted EBITDA of between $8bn and $8.5bn in both 2026 and 2027.

S&P also forecasts YPF’s adjusted debt-to-EBITDA ratio to remain at around 1.5 times over the next two years, with its calculation including gross debt, operating leases and asset retirement obligations.