AbstractYacimientos Petroliferos Fiscales (YPF) was formerly state‐owned and the largest company in Argentina in 1995. It was privatized in 1993, and was planning its second annual capital budget as a private‐sector company in the fall of 1994. When the Tequila Crisis hit Mexico in December of 1994, international borrowing became much more difficult for emerging market borrowers in general and Argentine borrowers in particular. This case presents the situation that faced YPF at the beginning of 1995, after most of the pieces of its capital budget had been laid out but not finalized at the end of 1994.