S&P ups Edenor outlook to positive

Standard & Poor's said it revised the outlook on Empresa Distribuidora y Comercializadora Norte SA (Edenor) to positive from stable.

The agency said that the positive outlook on Edenor's B corporate credit rating reflects the company's improving financial risk profile, mainly from the recent significant tariff increase for nonresidential users, enhanced liquidity and projected improvement of its financial flexibility.

In addition, the positive outlook also incorporates S&P's expectations that the global renegotiation of Edenor's concession contract will be carried out in 2008, which could result in a further improvement of its business and financial risk profile.

The ratings on Edenor reflect the high political and regulatory risk in Argentina, decreasing generation capacity reserves in the Argentine electric system, which could affect supply mainly to large users in 2007 and 2008 and the company's relatively high leverage and foreign exchange risk, the agency added.

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