Moody's might cut Repsol

Moody's Investors Service said it placed the Baa2 long-term issuer rating of Repsol YPF SA and the Baa2/Prime-2 ratings of Repsol International Finance BV's senior unsecured guaranteed debt on review for downgrade.

Moody's also placed the Ba1 preferred stock rating of Repsol International Capital Ltd. on review for downgrade.

Moody's said the action reflects the Argentinean government's decision to pass a law changing majority control in YPF Sociedad Anonima.

As a result, 51% of YPF's class D shares, all owned by Repsol, could be declared of public interest and subject to expropriation.

The action is expected to reduce Repsol's stake in YPF to 6% from 57%.

The government has also approved a presidential decree placing YPF under immediate state supervision and appointed a government minister as controller of the company, the agency said.

Moody's said it believes that the expropriation of Repsol from its 51% stake in YPF without adequate compensation from the Argentinean government will result in some significant weakening in the credit metrics of the group.

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