S&P puts ENAP on watch

Standard & Poor's said it placed the A foreign-currency corporate credit rating on Empresa Nacional de Petroleo SA on CreditWatch with negative implications.

"The CreditWatch listing reflects our concerns regarding the recent strong deterioration in the company's financial risk profile, resulting in very high leverage and a very weak liquidity position," S&P analyst Luciano Gremone said in a statement.

Ratings reflect the Republic of Chile's 100% ownership of the company, ENAP's importance as a public entity and its strong position in its core business as Chile's only domestic oil refiner, the agency said.

These factors are partially offset by the volatility and cyclicality in international refining margins, the company's very weak profitability and cash flow generation, and the challenges of expanding its business with limited cash flow, the agency noted.

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