Fitch revises Entel to negative

Fitch Ratings said it affirmed the long-term foreign and local currency issuer default ratings of Empresa Nacional de Telecomunicaciones SA (Entel) at BBB+.

The agency also affirmed the company's $800 million senior unsecured notes at BBB+ and national long-term rating at AA-(cl).

The outlooks on the issuer default ratings and national long-term rating were revised to negative from stable.

Fitch said Entel's ratings reflect its leading market position in the Chilean mobile telecommunications industry, fully integrated service portfolio, strong brand recognition, as well as the moderate regulatory risk in Chile and Peru. Conversely, the ratings are tempered by increasing industry maturity in Chile, the company's aggressive growth strategy in Peru, and increased leverage compared to its historical level.

The negative outlook reflects Entel's continued negative free cash flow (FCF) generation and deterioration in its leverage due to its aggressive marketing campaign and network investment in Peru in order to quickly achieve a sizable operational scale and market share, Fitch said.

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