OREANDA-NEWS. S&P Global Ratings affirmed its 'BBB' ratings on Transelec S. A. The outlook remains stable.

The company's operating and financial performance in 2015 and the first quarter of 2016 was in line with our expectations. Our 'BBB' rating and the stable outlook on Transelec reflect its excellent business risk profile, given its leading position in the Chilean electric transmission system, low country risk, favorable regulatory framework, and the very good operating efficiency. These factors allow the company to generate robust and stable cash flow, which compensates for its aggressive financial risk profile. Liquidity remains adequate because Transelec managed to refinance its short-term debt maturities through the recent issuance of 12.5-year $350 million senior unsecured notes.

Transelec's strong and stable cash flow generation compensates for its aggressive financial risk profile, stemming from sizeable debt, manageable capex, and aggressive dividends. We expect EBITDA to reach about $325 million in 2016 and 2017, which should allow the company to mostly finance capex of $200 million and distribute 100% of its earnings. Therefore, we expect Transelec to have a small shortfall in discretionary cash flow, which we expect the company to finance with debt.