Fitch Upgrades Enersis, Endesa

Fitch has upgraded Chile-based Enersis and Endesa, both to BBB+ from BBB citing operational and financial improvements. The agency expects that the power generation company’s solid credit metrics will be maintained over the medium term. Fitch says Enersis’s credit profile continued to strengthen in 2009 as it increased its liquidity position and reduced its leverage as its cash generation benefited from a better production mix, lower generation costs and higher sales to the spot market. As of September 2009, Enersis’ consolidated cash in hand was $2.4bn, which is further enhanced by available committed credit lines of approximately $1.2m. This coupled with the expectation that Enersis will generate positive free cash flow more than adequately positions the company to satisfy its $1.3m in consolidated debt maturing in 2010. The assigned ratings are linked to Enersis ability to consistently generate meaningful levels of free cash flow while maintaining a relative stable Ebitda, a net debt to Ebitda ratio below 2.0x and a consistent liquidity profile in relation to upcoming scheduled maturities.