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DCR Reaffirms Enersis' Proposed Yankee Offering at 'A-'

CHICAGO, Nov. 21 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR) reaffirmed Enersis' proposed Yankee bond offering at 'A-' (Single-A-Minus) and its local currency rating at 'A+' (Single-A-Plus), following an announcement that an international consortium including Enersis and one of its subsidiaries, Chilectra, will purchase a 70.3 percent stake in Companhia de Eletricidade do Estado do Rio de Janeiro S.A. (CERJ), formerly a state-owned electricity distribution company in Brazil. Enersis is a diversified utility holding company based in Santiago, Chile.

The consortium, which also includes Spain's Endesa and Portugal's state- owned utility, Electricidade de Portugal, will purchase the stake in CERJ for 605.3 reals or US$587 million. Enersis and Chilectra will have a combined 60 percent stake of the winning consortium, which represents 42 percent of CERJ. Chilectra will be the new operator of CERJ.

Enersis and Chilectra will fund their portion of the acquisition with approximately US$357 million of debt. The incremental debt will modestly pressure credit protection measures over the near term; however, Enersis' strong quantitative and qualitative indicators for its rating category will help maintain the company's credit quality. However, additional debt financed cross-border acquisitions could negatively affect the company's local currency rating.

Enersis' strategy of investing in utility privatization opportunities in growing economies should continue to diversify the company's operating cash flows into relatively low-risk regulated electric businesses. However, diversification benefits will be partially offset by increasing sovereign risks associated with higher levels of cash flows derived from investments in countries rated below investment grade.

Enersis is a diversified utility holding that is an efficient operator of electric distribution utilities. Enersis has varying ownership interests in: electric distribution companies in Chile, Argentina and Peru; electric generating companies in Chile; real estate investments in Chile; and electric utility-related service companies. CERJ is the second-largest electric distribution company in the state of Rio de Janeiro, Brazil. CERJ distributes electricity to approximately 1.2 million customers.

SOURCE Duff & Phelps Credit Rating Co.
 -0- 11/21/96

/CONTACT: Daniel R. Kastholm, CFA, 312-368-2070, or, or Frederico Knaudt, 312-368-3337, or, both of Duff & Phelps Credit Rating Co./

CO: Enersis; Chilectra; Companhia de Eletricidade do Estado do Rio de

Janeiro S.A. ST: IN: UTI SU: RTG

PD -- NYTH155 -- 5667 11/21/96 18:23 EST
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Publication:PR Newswire
Date:Nov 21, 1996
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