S&P affirms Transelec Chile

Standard & Poor's said it affirmed its A- corporate credit and senior unsecured debt ratings on Chile-based HQI Transelec Chile SA after the company announced a $70 million capital reduction.

The outlook is stable.

While net worth will decrease and leverage ratios will deteriorate, S&P said it does not consider Transelec's credit quality to have significantly changed given the transaction was fully financed with the company's large cash position that reached $114.2 million as of June 30.

S&P said its rating on Transelec reflects the company's strong business position and relatively stable cash flow generation in Chile.

However, Transelec's aggressive financial policy, which includes high leverage and capital expenditures, results in weak financial indicators for the rating category, the agency said.

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