Metrogas Taps Barcap, Suffers Downgrade

Argentina’s largest natural gas distributor Metrogas has hired Barclays to evaluate debt refinancing alternatives. S&P meanwhile chopped the issuer to CC from CCC minus, saying that the company faces high refinancing risk in 2010 and 2011, when maturities will reach $21m and $42m, respectively. The outlook on the rating is negative. “Metrogas’ financial risk profile has been gradually weakening during the past three years due to increasing operating costs and a high currency mismatch between revenues and debt service, amid inflation, currency devaluation, and freeze of tariffs,” says S&P.