Fitch rates Telefonica Chile notes BBB+

Fitch Ratings said it assigned an expected BBB+ rating to Telefonica Chile SA's proposed up to $500 million senior notes due 2022.

The company has a local-currency issuer default rating of BBB+, foreign-currency issuer default rating of BBB+, national scale long-term rating of AA(cl), national scale short-term rating of F1+(cl), local bonds series L, F, N and M rating of AA(cl) and equity rating of level 4.

The proceeds will be used primarily to refinance upcoming maturities of 2013 and 2014 and to a lesser extent for working capital needs and capital expenditures, Fitch said.

The ratings reflect its leading position in the Chilean fixed telecommunications market, solid financial profile and strong operating cash flow generation, the agency said.

The ratings also incorporate a strong competitive environment, low regulatory risk, weaknesses in local traffic and the policy of returning cash to shareholders, Fitch said.

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