Fitch: Prices Will Remain High in the Chilean Electricity Sector

SANTIAGO, Chile--()--Fitch Ratings expects Chilean corporates to continue to suffer due to electricity costs that are amongst the highest in the region despite falling hydrocarbon prices in 2015. Prices will remain vulnerable to external factors, being driven over the long term by uncontrollable variables such as hydrology and the international price of fossil fuels.

Although investment environment remains weak in the country, ratings outlook for this portfolio remains stable. Fitch believes Chilean energy companies will maintain relatively stable credit profiles in 2015, despite the industry's many challenges. Most companies have solid capital structures that enable them to face volatile conditions. Other credit strengths include funding flexibility, and, to a varying extent, diversified asset portfolios.

Electricity demand growth in Chile is expected to slow down along with the pace of its economy and it has been historically correlated with GDP growth. Fitch remains conservative with its outlook for GDP growth in Chile, projecting an average growth rate of 2.7% for 2015 and 2016.

The full report 'Chilean Electricity Sector - High Prices to Continue; Changes Still to Come' is available on 'www.fitchratings.com' or by clicking on the link below.

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

Applicable Criteria and Related Research:

--'2015 Outlook: Latin America Power (Stability Despite Economic Slowdown)' dated Dec. 15, 2014.

Applicable Criteria and Related Research: Chilean Electricity Sector (High Prices to Continue; Changes Still to Come)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=857748

2015 Outlook: Latin America Power (Stability Despite Economic Slowdown)

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=833508

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Contacts

Fitch Ratings
Paula Garcia-Uriburu
Director
+562 2499 3316
Fitch Ratings Chile
Alcantara 200 - Of. 202
Las Condes - Santiago de Chile
paula.garcia@fitchratings.com
or
Xavier Olave
Associate Director
+1-212-612-7895
Xavier.olave@fitchratings.com
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings
Paula Garcia-Uriburu
Director
+562 2499 3316
Fitch Ratings Chile
Alcantara 200 - Of. 202
Las Condes - Santiago de Chile
paula.garcia@fitchratings.com
or
Xavier Olave
Associate Director
+1-212-612-7895
Xavier.olave@fitchratings.com
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com