S&P ups Entel ratings

Standard & Poor's said it raised its long-term corporate credit rating on Empresa Nacional de Telecomunicaciones SA (Entel) to BBB+ from BBB. The outlook is stable.

"The upgrade reflects improvements in Entel's financial performance as a result of efficiencies achieved since 2002, a solid mobile business, lower investment needs, and a gradual decline in indebtedness levels. The upgrade also incorporates Standard & Poor's expectations that Entel will apply its cash holdings and part of the cash generation to continue to reduce debt levels - paying down most of the $145 million short-term maturities as of March 2004 - and that there will not be extraordinary acquisitions or investments in the short-to-medium term," said S&P credit analyst Ivana Recalde.

S&P said the ratings on Entel reflect its good competitive position as the second-largest integrated telecommunications provider in Chile, and its relatively efficient operations and moderate debt levels. These factors are partially offset by increased competition in all segments, and especially in its foreign operations. In addition, despite some geographic revenue diversification, Entel's cash-flow generation is still concentrated in and dependent on the domestic Chilean market, which is, however, one of the most stable marketplaces in the region.

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