Spanish oil major to proceed with bond sale after share price fall

Europe's fifth-largest oil company, Repsol-YPF SA, plans to go ahead with a sale of 1 billion to 1.5 billion euros ($884 million to $1.33 billion) of bonds next week after the company's credit rating was cut.

Nov. 16, 2001

By the OGJ Online Staff

LONDON, Nov. 16 -- Europe's fifth-largest oil company, Repsol-YPF SA, plans to go ahead with a sale of 1 billion to 1.5 billion euros ($884 million to $1.33 billion) of bonds next week after the company's credit rating was cut and its shares suffered the biggest one-day drop in 10 years.

Repsol's creditworthiness was downgraded to "BBB+'' from "A-'' by Standard & Poor's on concern that falling oil prices and a debt default in Argentina will reduce earnings.

The company's shares fell 6.8%, 15.10 euros, its biggest one-day drop in 10 years, after the price of crude oil fell in the wake of the Organization of Petroleum Exporting Countries (OPEC) meeting.

Repsol's $15 billion purchase of YPF in Argentina in 1999 made it one of Europe's most indebted oil companies. The company said this week that third-quarter profits fell by 31%, the second successive quarterly decline, as oil prices fell.