Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

 

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

Terms of One-Time Website Use

 

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

 

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

 

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

 

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's assigns Baa2 rating to Endesa Chile's senior unsecured notes; Outlook Stable

10 Apr 2014

New York, April 10, 2014 -- Moody's today assigned a Baa2 rating to Empresa Nacional de Electricidad S.A.'s (Endesa Chile) proposed US$400 million 10-year senior unsecured yankee bonds. Concurrently, Moody's also affirmed Endesa Chile's Baa2 senior unsecured rating. The rating outlook is stable. Proceeds from the issuance will be largely used to repay Endesa Chile's outstanding intercompany loan with its majority shareholder Enersis S.A. (Enersis) that currently approximates US$350 million as well as for other general corporate purposes.

RATINGS RATIONALE

"Since Moody's already calculates Endesa Chile's leverage credit metrics incorporating the Enersis' intercompany loan, this proposed transaction does not change Endesa Chile's leverage position" said Natividad Martel, a Moody's Vice President. "The affirmation of the Baa2 rating is largely driven by the expectation that Endesa Chile will continue to report 3-year average credit metrics that will remain commensurate with the Baa-rating category according to the financial ratio guidelines for Baa-rated power producers outlined in Moody's Unregulated Power Generation Companies ratings methodology" added Martel. Specifically, that its 3-year CFO pre W/C to debt and interest coverage has averaged in the high 20% and 4.0x range, respectively.

Importantly, the rating action assumes Endesa Chile will be able to record credit metrics this year that are at least comparable to those reported at year-end 2012 despite the impact on its 2014 financial performance from the shutdown of its 350MW coal-fired facility Bocamina II. In December 2013, the Court of Conception ordered the temporary halt of this generation plant after granting an injunction in favor of local fishermen due to possible environmental issues. Endesa Chile is pursuing different alternatives to regularize the plant's environmental permit situation; however, the length and outcome of this legal procedure is still uncertain.

Endesa Chile estimates that the monthly impact of this shutdown on its operating margin could range between US$21 million and US$45 million. Moody's considers Endesa Chile's 2012 financial performance in the Chilean Sistema Interconectado Central (SIC) to be a good proxy for 2014's operating results because Endesa Chile's cash flow generation that year was also negatively impacted by a combination of the over one year delayed commissioning in the 2H of 2012 of the 350MW Bocamina plant along with drier than usual hydrological conditions. This resulted in a peak in Endesa Chile's power procurements in the spot market (2012: 7.8% versus 2013: 4.7% of total sales) to meet its contractual obligations amid high spot power prices. The plant's operations during 2013 significantly contributed to the issuer's enhanced performance in the SIC compared to the previous year. Specifically, the issuer's Chilean operations recorded an EBITDA of around US$730 million (2012: US$530 million). That said, Moody's believes that the issuer's exposure to the spot power market this year to meet its contractual requirements will be also higher given the still prevailing drier than usual hydro-conditions as its contracted obligations have continued to step up (includes loads contracted with distribution utilities of 16TWh in 2014; 14.8TWh in 2013; 14TWh in 2012) on top of the absence of Bocamina II's output (2013: around 2.2TWh). Moody's also acknowledges that Endesa Chile's cash flows in the SIC currently benefit from the improved margins of its 778MW two-unit San Isidro combined-cycle natural gas fired plant following the better pricing (max US$10/MBTU) that resulted from the renegotiation with British Gas of the Liquefied Natural Gas (LNG) supply agreements in July 2013.

The impact on Endesa Chile's financial performance and liquidity will undoubtedly depend on the length of the shutdown but also on the development of the SIC's spot power prices. Given this uncertainty, the affirmation of the Baa2 rating is predicated on the assumption that in order to comfortably cope with any extended stress situation, Endesa Chile will further maintain a robust liquidity profile in the form of cash and short-term investments (at year-end 2013 around US$650 million on a consolidated basis and about US$110 million in Chile) as well as available amounts under its two committed revolving credit facilities that currently aggregate US$307 million. In this regard, the Baa2 rating assumes that Endesa Chile will renew ahead of time its US$200 million committed revolving credit facility that is scheduled to expire in June of this year. Moody's further acknowledges that Endesa Chile could receive new intercompany loans from its majority shareholder Enersis given that it still has material amounts of cash after its capital increase in 2013.

Endesa Chile's Baa2 rating is further underpinned by the benefits associated with the group's geographic diversification, and that its cash flows are enhanced by the dividends received from its key subsidiaries operating outside of Chile (over US$250 million in 2013; 2012: US$133 million) with the exception of Argentina. These subsidiaries also have a dominant position in their respective power markets. Their cash flow volatility resulting from their hydrology risk exposure is materially reduced with the group's commercial policy designed to limit contracted sales requirements to an amount that does not exceed the estimated output in a dry year.

The rating also incorporates an expectation that Endesa Chile will prudently fund its sizeable pipeline of projects that includes the Board of Directors recently authorized 150MW Los Condores hydroelectric project (total investments: US$661.5 million), or the recent acquisition of the remaining 50% interest-stake in GasAtacama for US$309 million. That said, some of its new developments such as 2,750 MW Hidroaysen hydroelectric still face environmental opposition. It should be noted however that, following the recent change in Chile's government, the new energy authority released a report that indicates that coal-fired facilities will play a more significant role in the energy policy to overcome the energy challenges that the country, particularly in the SIC, is currently facing.

The Baa2 rating also assumes that the issuer will continue to maintain a conservative dividend policy with a payout ratio that currently represents 50% of the distributable net income. Moody's believes that ENEL's public de-leveraging objectives, which are evaluated in terms of net debt, have historically deterred ENEL from materially increasing distributions from its Latin American operations, given the sizeable minority interests that currently exist at Enersis and Endesa Chile and the obvious negative impact on their cash balances which is viewed as a credit positive.

The stable outlook reflects our expectation that Endesa Chile's financial metrics will remain well-positioned within the Baa category, despite the financial impact associated with the Bocamina II plant shutdown and that new projects will be conservatively funded. The stable outlook also assumes that Endesa Chile will maintain a robust liquidity profile to cope with any extended stress situations.

Over the near-to-intermediate term, upward rating pressure at Endesa Chile is unlikely given the funding of a sizeable multi-year investment program currently under consideration. That said, a rating upgrade could occur if Endesa Chile records credit metrics that are robust for its current rating category. Specifically, if its 3-year average CFO pre-W/C to debt and interest coverage would exceed 36% and 6.5x, respectively, on a sustainable basis.

Downward rating pressure could surface if Endesa Chile's financial performance and/or liquidity profile deteriorates significantly after a massive increase in spot power prices in the SIC given the company's increased power procurement requirements to meet its contractual obligations in light of the shutdown of the Bocamina II plant. To that effect, liquidity management will play a key role in any rating consideration. A downgrade could be also triggered if ENEL and/or Endesa S.A. were to rely more heavily on the cash flows from Endesa Chile. Also, an Endesa Chile rating downgrade could occur if for an extended period of time it reports consolidated and/or standalone credit metrics that are weak for its current rating category. Specifically, if its consolidated or standalone 3-year average CFO pre-W/C to debt and interest coverage would drop below 26% and 3.5x, respectively, for an extended period.

The principal methodology used in this rating was Unregulated Utilities and Power Companies published in August 2009. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

Headquartered in Santiago, Chile (Aa3, stable), Endesa Chile is an operating holding company. The group ranks among the largest private generation companies in Latin America with an aggregate installed generation capacity of around 14GW. In Chile, Endesa Chile and its Chilean subsidiaries operate 5.6 gigawatts (GW) of total installed capacity, while its Argentinean subsidiaries, Endesa Costanera (70%-owned) and Hidroelectrica El Chocon (65%-owned) (HEC: CFR: Caa1/stable) operate 3.65 GW. Endesa Chile has a 62.5% economic interest in the Peruvian power generation company Edegel (1.66 GW) via a 29.4% direct stake and a 61% ownership interest in Generandes Peru (54.2% owner of Edegel). Endesa Chile also has a 26.9% direct stake in Emgesa, a Colombian power generation company that owns 2.91GW; however, it controls through a shareholders' agreement. Endesa Chile also has a 39% interest in Endesa Brasil, as well as beneficial interest in jointly-owned entities including Centrales Hidroelectricas de Aysen S.A. (HydroAysen; 51%), Gas Atacama Holding Ltd (slated to increase to 100%), and a 20% interest in the Chilean Quintero LNG re-gasification plant.

Endesa Chile's direct controlling shareholder is Enersis S.A. (Baa2; stable) via its 59.98% ownership-stake, while its indirect controlling shareholder (33.7% interest) is ENEL, Spa (ENEL; Issuer Rating: Baa2, negative) via Endesa S.A. (P-2) that owns 60.6% of Enersis. Endesa Chile's remaining shareholders include Chilean pension funds (14.13%), other institutional (17.7%) and retail investors (3.64%) as well as ADR-holders (4.56%).

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this rating action, and whose ratings may change as a result of this rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Natividad Martel
Vice President - Senior Analyst
Infrastructure Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

William L. Hess
MD - Utilities
Infrastructure Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's assigns Baa2 rating to Endesa Chile's senior unsecured notes; Outlook Stable
No Related Data.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE APPLICABLE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS (“ASSESSMENTS”), AND OTHER OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

MOODY’S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody’s Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $5,000,000. MCO and Moody’s Investors Service also maintain policies and procedures to address the independence of Moody’s Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.