Fitch Ratings on Tuesday upgraded YPF S.A.'s long-term Foreign and Local Currency Issuer Default Ratings to B- from CCC+. The agency also raised the rating on the company's outstanding senior unsecured notes to B- from CCC+, keeping a Recovery Rating of RR4, and set the outlook to Stable.
In a separate action, Fitch elevated YPF's Standalone Credit Profile to b+ from b. The ratings move follows the firm's application of its Government Related Entities (GRE) Criteria and reflects Argentina's 51% ownership of the company and YPF's strategic importance in supplying most of the country's fuels and in advancing upstream and midstream hydrocarbon activity. The agency noted that provincial government officials sit on YPF's board of directors.
Fitch equalized YPF's rating with Argentina's sovereign rating of B- with a Stable outlook, which the agency had upgraded in May 2026. The equalization reflects the absence of legal ring-fencing that would prevent sovereign interference in the company's cash flows. Under Fitch's GRE assessment, the agency said incentives for the sovereign to support YPF and the risks of contagion to the sovereign are both high.
In its rating case, Fitch assumed average production of 640,000 barrels of oil equivalent per day over the rating horizon, up from an assumed 550,000 boe/d. The agency reported that YPF's 2025 lifting cost declined to $11.6 per barrel of oil equivalent, a 44% reduction compared with 2024. Fitch estimated half-cycle costs at about $18 per boe.
Fitch also outlined a projected improvement in leverage metrics, expecting total debt to EBITDA of about 1.7 times in 2026 versus 2.5 times in 2025.
Despite the upgrades, Fitch said Argentina's operating environment continues to constrain YPF's Standalone Credit Profile and results in a one-notch adjustment. The agency highlighted YPF's dominant market positions - a 56% share of the refined products market and the largest licensed acreage position for crude and gas - while noting that macroeconomic challenges in Argentina limit the company's financial flexibility. Fitch added that YPF has demonstrated access to both local and international financial markets.
Implications
The rating actions align YPF's credit standing with sovereign developments and reflect both operational improvements and persisting country risks. The adjustments incorporate production and cost assumptions, leverage expectations, and the company's market position in refined products and upstream acreage.