Fitch affirms ENAP

Fitch Ratings said it affirmed the foreign-currency issuer default rating of Empresa Nacional del Petroleo (ENAP) at A, its national long-term rating at AAA(chl), its $290 million senior unsecured notes due 2012 and $150 million senior unsecured notes due 2014 at A and its 3.25 million Unidades de Fomento senior notes due 2012 at AAA(chl).

The outlook is positive for ENAP's foreign-currency issuer default rating and stable for its national scale rating.

The agency said the ratings and positive outlook continue to be underpinned by the company's state ownership, government support, dominant market share and strategic importance to the Republic of Chile.

However, Fitch said it is important to underscore that ENAP's decreasing refining margins and cash flow have been adversely affected by the natural gas shortage in Chile, higher crude oil feedstock prices and increased diesel fuel use at ENAP's refineries. As a result, ENAP's deteriorating credit measures place it well below its current rating category on a standalone basis, the agency said.

For the last 12 months March 31, the total adjusted net debt-to-EBITDA ratio was about 3.8 times.

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