Empresa Nacional del Petroleo

Overview Key strengths Key risks The company operates 100% of Chile?s refining capacity and is a leading supplier of refined products in the country. Although historically high leverage has decreased, ENAP is in a capital-intensive business, so higher capital expenditures (capex) and potential new dividends to the government could deviate metrics from the expected deleveraging path. Financial discipline in recent years has resulted in a steady improvement of credit metrics, indicated by debt to EBITDA below 4x from an average above 7x in the last few years. Inherent volatility of its core businesses because they are linked to factors outside of the company?s control such as refining differentials and global crude oil prices. Benefits from very high extraordinary support from

...ENAP is a government-owned company that plays a very important role in the domestic economy. We anticipate unwavering ongoing and extraordinary support from the government in times of financial distress. Our ratings on Empresa Nacional del Petr=leo (ENAP) reflect our view that there's a very high likelihood that its owner, Chile (foreign currency: A/Negative/A-1; local currency: A+/Negative/A-1), will provide timely and adequate extraordinary support if needed. We base this on our belief of ENAP's very important role as Chile's sole oil refiner, supplying approximately 55 % of the domestic market's needs, with the remainder sourced from imports....

Full Report