ENAP Opts for Bond

Chile’s ENAP is expected to raise up to $500m through a bond issue as soon as today, according to investors. The state-owned gas company is heard whispering a high 5% yield in meetings with the buyside this week, conducted officially on a “non-deal” basis, as it weighs fundraising options which also included a syndicated loan. A 10-year issue is anticipated. Low cashflow and high leverage have strained ENAP’s credit profile, as indicated by a recent downgrade to BBB minus from BBB from S&P and an outlook change to negative on a Moody’s A3 rating. However, Chile’s government is seen as a willing provider of support, should the situation rapidly worsen. BofA Merrill Lynch, BBVA, BNP and Scotia have been coordinating investor meetings this week in London, Boston and New York.