Fitch Ratings rates Entel bond issues AA

Tuesday, July 5, 2011

Fitch has assigned its AA(cl) rating on Chilean telco Entel's new bond issues, with a stable outlook, the ratings agency said in a report.

Entel will issue two bond lines, each worth 5mn of the country's UF inflation-linked unit (worth a total 110bn pesos, or US$236mn), with maturity at 10 and 30 years. The proceeds will be used to refinance liabilities and investments.

The ratings reflect the company's strong credit profile, which has supported the high level of investments demanded by the telecoms industry. The company presents low debt levels and growing operational cash flow generation.

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The ratings are also supported by Entel's experience in the national telecoms industry, making it the market leader in terms of revenues, with a 37% share at the end of March.

Fitch also considered the heightened competition in the industry, which could heat up once the number portability system starts operating. The ratings action also regards weakening of the fixed voice segment and a moderate regulatory risk.

Use this link to see the full report, in Spanish.