Fitch to assign A to ENAP debt

Fitch Ratings said it expects to assign a rating of A(EXP) to Empresa Nacional del Petroleo (ENAP)’s proposed senior unsecured debt issuance of $700 million due 2026.

ENAP intends to use proceeds to fund the tender offer for up to $600 million of the company's bonds with maturities in 2019, 2020 and 2021; the remaining proceeds will be used to finance working capital and for general corporate purposes. ENAP announced the tender offer on July 19. The offer expired on Aug. 1. After the tender, the principal amount outstanding of the 2019, 2020 and 2021 notes will be $700 million.

The notes will rank pari passu in priority of payment with all other ENAP's senior unsecured debt, Fitch said. They would be rated the same as all of ENAP's senior unsecured obligations. As in the rest of ENAP's long-term financing, the only covenant for this debt issuance is a change of control clause.

Fitch said the ratings reflect ENAP's 100% ownership by the Chilean state and the sound credit profile of its parent. The company has strong legal, operational and strategic ties with the state, and possesses strategic importance to Chile given it assures a significant portion of the country's energy supply, the agency added.

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