Correction: Fitch Downgrades CORPOELEC's IDRs to 'CCC'

NEW YORK--()--(This is a correction of a release published Dec. 19, 2014. It clarifies that the Rating Outlook for CORPOELEC, which had previously been Negative, has been removed.)

Fitch Ratings has downgraded Corporacion Electrica Nacional S.A.'s (CORPOELEC) foreign and local currency Issuer Default Ratings (IDRs) to 'CCC' from 'B'. Fitch has also downgraded approximately USD650 million of senior unsecured debt outstanding to 'CCC/RR4' from 'B/RR4'. Concurrently, Fitch has downgraded CORPOELEC's national long-term rating to 'AA(ven)' from 'AAA(ven)' and has also affirmed its national short-term rating at 'F1+(ven)'.

Prior to this downgrade, the Rating Outlook for CORPOELEC was Negative. Fitch has removed the Negative Outlook, as the agency does not assign Outlooks to ratings of 'CCC' or below.

The rating downgrade follows Fitch's downgrade of the sovereign ratings of Venezuela to 'CCC' from 'B'. The downgrade of the sovereign ratings reflects the sharp decline of international oil prices, which increase balance of payments pressures in the context of reduced external financing flexibility and rising macroeconomic instability.

KEY RATING DRIVERS

CORPOELEC's ratings reflect the company's strong linkage to the government of Venezuela (rated 'CCC' by Fitch), given its tight integration into the public sector determined by its 100% public ownership and its dependence on public funding to carry on its day to day operations, honor its financial obligations and finance its capital expenditure needs.

RATING SENSITIVITIES

The key rating triggers that could lead to a negative rating action include:

--A downgrade of the sovereign;

--Lack of financial support coming from the central government and its agencies in order to allow CORPOELEC to service its financial obligations on a timely basis, particularly the EDC bonds maturing in October 2018 (USD 650 million).

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Corporate Rating Methodology' (May 2014).

Applicable Criteria and Related Research:

Corporate Rating Methodology - Including Short-Term Ratings and Parent and Subsidiary Linkage

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749393

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=965635

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Contacts

Fitch Ratings
Primary Analyst
Giancarlo Rubio
Associate Director
+1-212-612-7899
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Secondary Analyst
Julio Ugueto
Associate Director
+571-326-9999 x1038
or
Committee Chairperson
Joseph Bormann
Managing Director
+1-312-368-3349
or
Media Relations
Elizabeth Fogerty, +1 212-908-0526
New York
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Giancarlo Rubio
Associate Director
+1-212-612-7899
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Secondary Analyst
Julio Ugueto
Associate Director
+571-326-9999 x1038
or
Committee Chairperson
Joseph Bormann
Managing Director
+1-312-368-3349
or
Media Relations
Elizabeth Fogerty, +1 212-908-0526
New York
elizabeth.fogerty@fitchratings.com