Fitch: Potential Change in Enersis Ownership Structure Likely Neutral to Credit Quality.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. views the announcement of Gas Natural, SDG's (Gas Natural) unsolicited EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 22.5 billion (US$28.3 billion) takeover bid Noun 1. takeover bid - an offer to buy shares in order to take over the company two-tier bid - a takeover bid where the acquirer offers to pay more for the shares needed to gain control than for the remaining shares for 100% of Empresa Nacional de Electricidad S.A. of Spain (Endesa-Spain) as likely to be neutral to the credit quality of Chile's Enersis S.A. (Enersis) and Empresa Nacional de Electricidad S.A. (Endesa-Chile). Enersis is currently 60.62% owned by Endesa-Spain. As noted in a separate release ('Fitch Places Spain's Gas Natural And Endesa on Negative Watch Following Takeover Bid,' dated Sept. 6, 2005), however, Fitch has placed the ratings of both Gas Natural (senior unsecured rating of 'A+')and Endesa-Spain (senior unsecured rating of 'A') on Rating Watch Negative. There are numerous regulatory, administrative and political issues to be clarified and resolved in the coming months. Fitch currently assigns the following ratings to Enersis and Endesa-Chile: Enersis -- International local and foreign currency 'BBB-' (Outlook Positive); -- Long-term national scale corporate rating 'A+(chl)' (Outlook Stable). Endesa-Chile -- International local and foreign currency 'BBB-' (Outlook Positive); -- Chilean national scale rating 'A+(chl)' (Outlook Stable). The companies' credit profile is related to the degree to which any new ultimate shareholder would change Enersis' and Endesa-Chile's financial and/or growth policies and strategies. Gas Natural has noted that the combined Latin American investments would provide an excellent growth platform for the new group, which could affect the company's credit profile depending on how the growth is funded. Fitch expects additional announcements regarding the investment strategy and the long-term financial structure for Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. to be made should the acquisition become more certain. Gas Natural is Spain's dominant natural gas player, with majority market shares in regulated distribution and unregulated Adj. 1. unregulated - not regulated; not subject to rule or discipline; "unregulated off-shore fishing" regulated - controlled or governed according to rule or principle or law; "well regulated industries"; "houses with regulated temperature" 2. supply, and, with its investments in Latin America, serves close to 10 million customers. It is also a leader in the Latin American gas market, with a presence in Brazil, Argentina, Colombia, Mexico, and Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. . Other activities include international gas supply and transportation, and electricity generation and supply. The group's financial profile has been strong for the rating level: fiscal (FY) 2004 net debt (including EUR684 million in finance leases related to the funding of two cryogenic cryogenic /cry·o·gen·ic/ (-jen´ik) producing low temperatures. cry·o·gen·ic adj. 1. Relating to or producing low temperatures. 2. vessels) to EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become was less than 2.5 times (x) and EBITDA/net interest coverage was approximately 9x. Similar to the strategy employed by Endesa-Spain, most of Gas Natural's Latin American activities are funded locally on a nonrecourse basis. Fitch assumes that Gas Natural would remain committed to Latin American markets given their growth potential and existing material presence in the region. Enersis is the largest private electricity distribution group in Latin America. The company has varying ownership interests in electric-distribution companies in Argentina, Brazil, Chile, Colombia, and Peru; electric-generating companies in Argentina, Brazil, Chile, Colombia and Peru through Endesa-Chile; and electric utility related service companies throughout Latin America. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. 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