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Moody's affirms Chile at Aa3, maintains stable outlook


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Moody's affirms Chile at Aa3, maintains stable outlook

Moody's on July 11 affirmed Chile's issuer and seniorunsecured bond ratings at Aa3 and maintained a stable outlook.

Chile's foreign currency bond ceiling remains at Aa1, itsforeign currency deposit ceiling remains at Aa3, and its long-term localcurrency bond and deposit ceilings remain at Aa1.

The affirmation reflects Moody's assessment that the countrywill retain a strong fiscal position despite increases in its main debt metricsand a slowing economy.

Moody's notes that despite a commodities-fueled growth thathas ended, Chile's growth still compares well to most other Aa-ratedsovereigns, and its institutional framework remains strong despite politicalopposition to and investor concerns over Chilean President Michelle Bachelet'spolicies.

The stable outlook reflects Moody's expectation that Chile'sdebt burden will rise to 19% of GDP in 2016 and 22% in 2017, from less than 10%in 2010, but it will do so slowly. Also, Moody's believes that even at theselevels, Chile's debt burden will remain lower than most Aa-rated sovereigns andabout half that of the Aa average of 44%.

S&P recently affirmed Chile, reflecting its stable democracy, predictablepolicy framework and low debt burden, among other factors. Fitch alsoaffirmed Chile due toits "credible" macro policy framework and other factors,counterbalanced by low per capita GDP and high commodity dependence relative topeers.

S&P Global Ratingsand S&P Global Market Intelligence are owned by S&P Global Inc.