S&P ups Empresa Nacional de Telecomunicaciones outlook to stable

Standard & Poor's said it revised its outlook on Empresa Nacional de Telecomunicaciones SA (BBB+) to stable from negative, reflecting the company's faster than expected recovery of its financial measures and profile, as a result of higher mobile growth rates and cash generation in 2005 and first-quarter 2006.

The agency said that this improvement in cash generation allowed the company to offset the effect of a more aggressive financial policy-after the approval of an increase in dividend payout to up to 80% of net income and of an extraordinary dividend of about $350 million in 2005.

According to S&P, the ratings on the company reflect its good competitive position as a leading integrated telecommunications provider in Chile, efficient operations and moderate debt levels, noting that these factors are partially offset by increased competition in all segments.

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