ENAP Gets Chop on High Leverage

S&P has cut Enap to BBB (stable) from A and removed it from credit watch negative. The agency cites the Chilean oil refining company’s high leverage and weak liquidity position as reasons for the reduction. It also reflects the company’s exposure to business challenges, including the need to import all of its crude oil, commodity price volatility, unstable refining margins, and increasing diesel imports to replace Argentine natural gas, all of which have affected operating performance. Enap supplies about 80% of local market oil needs.