Fitch lowers Entel view to negative

Fitch Ratings said it affirmed the long-term foreign- and local-currency issuer default ratings and $1.8 billion senior unsecured notes of Empresa Nacional de Telecomunicaciones SA (Entel) at BBB-.

Fitch also said it affirmed Entel's national long-term rating at A+(cl).

The outlook was revised to negative, reflecting the company's weak operating cash flow performance, which resulted in high leverage for the rating level, the agency said.

Failure to lower leverage close to 3.5x during the next year could lead to a downgrade of the company's international ratings into speculative-grade territory, Fitch said.

Entel's BBB- and A+(cl) ratings reflect its leading market position in the Chilean mobile telecommunications industry, network competitiveness, strong brand recognition and the moderate regulatory risk in Chile and Peru, the agency said.

The company's improving profitability in Peru will be Entel's primary challenge during 2019 as it seeks to strengthen its credit profile, Fitch said.

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