Moody's assigns Baa3 to ENAP notes

Moody's Investors Service said it assigned a Baa3 rating to Empresa Nacional del Petroleo's (ENAP) proposed $500 million senior notes.

ENAP's existing ratings remain unchanged. The outlook is negative.

Net Proceeds from the proposed issuance will be used for liability management (primarily for its $410 million senior unsecured notes maturing in December 2021) and other general corporate purposes.

Moody’s said ENAP's Baa3 senior unsecured notes rating reflect its long operating history, high market share in Chile's refined products market and increasing business diversification. The ratings are constrained by the company’s weak liquidity, the inherent volatility in commodity prices and the resulting uncertain profitability, and its high leverage as measured by Moody's-adjusted retained cash flow/net debt of 7.4% and debt/EBITDA of 8.1x for the 12 months that ended on June 30, 2021.

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