...Balanced Contractual Position: Colbun S.A. benefits from long-term contracts with financially strong power distribution company and industrial counterparties. The contracts have adequate indexation mechanisms that closely match the company's generation mix and somewhat mitigate Colbun's exposure to fuel price volatility. Based on normal hydrology, Colbun's contract requirements are balanced and its contracted volume is expected to be approximately 12,000 gigawatt hours (GWh) per year and increasing as new projects come online. Favorable Natural Gas Contracts: Under a dry hydrology scenario, Colbun's contracted volume could be met with its natural gas backup units or by purchases in the spot market, typically with a negative effect on margins. Positively, Colbun secured temporary provisions of natural gas for its thermal units through contracts with Metrogas S.A. and Empresa Nacional del Petroleo (ENAP) until 2019. Fitch Ratings views positively the 20-year contract with GNL Chile securing...
