Enersis and Endesa on Upgrade Track

Moody’s says it has placed the Baa3 ratings of Chile-based electricity companies Enersa and Endesa, both units of Italy’s Enel, under review for possible upgrade. It cites improved macroeconomic factors and lessened concern for the parent company’s dividend policy. “While the parent has publicly committed to reduce leverage in terms of net consolidated debt, we observe that the dividend policy affecting Enersis and Endesa Chile operations has not changed materially within the past year,” Moody’s says. “We also believe that the existence of the minority ownership structure reduces the financial rationale for Enel to greatly increase distributions from its LatAm operations as this would result in a substantial cash outflow to the minority shareholders that would deteriorate it’s consolidated net debt position,” it adds.