Empresa Nacional del Petroleo

In addition, the company received a capital contribution of $400 million in 2018 from the government. We believe that this underscores our view that ENAP has a very strong link to, and a very important role with, the government. The stable outlook reflects that ENAP will continue to play a very important role in Chile's energy policy and will maintain its very strong link to the government in the next 12-24 months. The outlook also reflects our expectations of net debt to EBITDA in 7.5x-8.0x and funds from operations (FFO) to debt of 5%-10%. A downgrade is possible if the company's liquidity deteriorates, which could be due to ENAP's weaker ability to refinance its short-term debt if the government's ongoing

...Given that the government owns the company, which plays a large role in the domestic economy, we expect ongoing and extraordinary support from the government in case of financial distress.The ratings on Empresa Nacional del Petr=leo (ENAP) continue to reflect our opinion that there's a very high likelihood that its owner, the Republic of Chile (foreign currency: A+/Stable/A-1; local currency: ##-/Stable/A-1+), would provide timely and sufficient extraordinary support to the company in the event of financial distress. Our assessment is based on our view of ENAP's very important role as Chile's only domestic oil refiner and its ability to supply about 60% of the domestic market's needs (the remainder is supplied by imports). The company also has a very strong link to the government, particularly regarding debt authorization, budget approval, and tax payments. In addition, the company received a capital contribution of $400 million in 2018 from the government. We believe that this underscores...

Full Report