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Distressed Argentina Oil Firm Leads Emerging-Market Bonds

  • YPF’s bonds have rallied amid an operational turnaround
  • CFO Lew: ‘Things evolved in much better way than anticipated’
A YPF SA facility in Plaza Huincul, Neuquen province, Argentina.
A YPF SA facility in Plaza Huincul, Neuquen province, Argentina.Photographer: Anita Pouchard Serra/Bloomberg
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Only 14 months ago Argentina’s YPF SA was a nightmare for investors caught out by a $6 billion distressed debt restructuring. Now, in a swift turnaround, the 100-year-old state-run oil company is producing the best fixed-income returns in all of emerging markets. 

YPF has rewarded steely creditors with returns topping 20% this year on some of its notes. It emerged from the pandemic with a strong cash position after bondholders agreed to push back $630 million in debt payments, helping fund long-term investments in Vaca Muerta, the vast Patagonian shale patch. Repeated promises by executives to reverse a long decline in oil production have finally started to come true.