Moody’s Negative on ENAP

Moody’s has changed the outlook of Chile-based ENAP’s A3 ratings to negative from stable to reflect the oil company’s high leverage, which is equivalent to about 7.7x debt-to-Ebitda. Moody’s says it remains concerned that the company has limited opportunities to reduce debt given expected continued levels of high capital spending over the near to medium term while refining margins will likely remain below mid-cycle averages. As such, sizable debt reduction without a capital infusion from the government will be difficult, it believes. S&P had already chopped ENAP’s ratings to BBB minus from BBB July 30.