S&P cuts Chilean financials

S&P said it lowered Banco del Estado de Chile’s (Banco Estado) long-term issuer credit rating to A+ from AA- and short-term rating to A-1 from A-1+.

The agency also downgraded the long-term rating on Banco de Chile to A from A+ and affirmed the short-term rating at A-1.

The outlook on both entities is now stable.

Additionally, S&P placed the issuer credit and debt ratings on the following entities on CreditWatch negative: Banco Santander-Chile SA, Banco de Credito e Inversiones, Itau CorpBanca, Banco BICE, Banco Bilbao Vizcaya Argentaria Chile y Filiales, Banco Security, Cooperativa Del Personal de La Universidad de Chile Ltda-Coopeuch Ltda., Tanner Servicios Financieros SA, Larrain Vial SA Corredora de Bolsa and LQ Inversiones Financieras SA.

In addition, the agency affirmed the B- rating and maintained the negative outlook on Corp Group Banking SA because of its high leverage and tight liquidity position.

S&P said the actions follow the downgrade of Chile as a result of the erosion in macroeconomic profile and modest increase in the sovereign's vulnerability to external shocks.

“The combination of still low global copper prices and low domestic business confidence continue to constrain private consumption and investment, limiting the country's GDP growth prospects,” the agency said in a news release.

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