CELEO REDES OPERACION CHILE S. A...Headquartered in Santiago, Celeo Redes Operation Chile S.A. (Celeo) Celeo holds a 99.99% direct interest stake in AJTE, CHATE and DATE. Celeo is

INFRASTRUCTURE AND PROJECT FINANCE

ISSUER IN-DEPTH28 April 2017

TABLE OF CONTENTSOverview of Transaction 2Corporate Profile 3Detailed Rating Considerations 4Rating Outlook 7Factors that Could Lead to anUpgrade 7Factors that Could Lead to aDowngrade 7Appendix I - Scoring under theGeneric Project Finance Methodology 8Appendix II - Summary of theFinancial Structure 9Appendix III - Strategic location ofAJTE and CHATE 10Moody's Related Research 11

Contacts

Natividad Martel,CFA

212-553-4561

VP-Senior [email protected]

Adena Schmidt 212-553-6871Associate [email protected]

Daniela Cuan 54-11-5129-2617VP-Senior [email protected]

Alejandro Olivo 52-55-1253-5742Associate [email protected]

CELEO REDES OPERACION CHILE S.A.New Issuer

Celeo Redes Operacion Chile S.A. (Celeo) owns three electric transmission projects in Chile:Diego de Almagro Transmisora de Energia S.A. (DATE), Alto Jahuel Transmisora de EnergiaS.A. (AJTE) and Charrua Transmisora de Energia S.A. (CHATE). AJTE and CHATE will jointlyand severally guarantee Celeo´s planned Notes.

Celeo plans to issue up to up to US$360 million in US-dollars senior secured Notes (Baa2stable) as well as an equivalent of US$215 million in UFs (Chile’s inflation-indexed peso-denominated monetary unit) largely to repay AJTE's and CHATE's existing project debt.

Celeo’s Baa2 senior secured rating reflects:

The low operating risk of key 500KV transmission assets in Chile (Aa3 stable) whichare held in perpetuity. AJTE's two circuits (AJTE 1 and AJTE2) report high availability ratiosfollowing their commission in Septemer 2015 and January 2016. To date, the authorities havelevied monetary fines only after outages. A cap on deductions set at 5% of revenues, willstart to apply in 2020, under the new transmission law (Law 20.936).

Predictable revenue stream. AJTE 1 and CHATE account for the majority of Celeo's cashflows and will receive fixed project revenues during 20-years after their CoD. Our view of thesupportive Chilean regulatory environment underpins our expectation that AJTE 2’s tariffswill benefit from credit positive tariff reviews, called Resettable Project Revenues, starting in2020. After 2035 and 2037, AJTE 1’s and CHATE’s tariffs will become also subject to reviews.

Cash flows visibility further underpinned by the availability-based paymentsand adjustments mechanisms. The projects' revenues are subject only to availability.Indexation formulas result in inflation-linked as well as US$- and Chilean Peso-linked cashflows which provides for natural hedges given Celeo’s debt currency-mix.

The transaction includes creditor protections that are typical for project financingstructures. These include designated accounts, such as a 6-month debt service reserve anda 3-month O&M reserve, a security package that benefits senior creditors and a distributiontest based on a 1.15 times DSCR, rising to 1.20 times after January 2036.

THIS REPORT WAS REPUBLISHED ON 28 April 2017 TO UPDATE SOURCES AND USES TABLE.

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MOODY'S INVESTORS SERVICE INFRASTRUCTURE AND PROJECT FINANCE

The Baa2 rating is largely constrained by:

Celeo exhibits very high initial leverage. This along with the long-term uncertainty regarding the value of the projects’ assetbase used in setting tariffs, Value of Investments, increases the credit risk during the final ten years of the 2047 Notes. However, weacknowledge that the debt amortization profile has been designed to target a minimum 1.25x DSCR for cash flows subject to fixedtariffs (that is, for AJTE 1 pre-2035 and CHATE pre-2037) and 1.35x DSCR for cash flows subject to resettable tariffs (that is, AJTE 2starting in 2020 and AJTE 1/CHATE after 2035/2037, respectively).

Some exposure to unregulated generation companies' concentration risk. However, their credit profile is satisfactory. Moreover,according to the new transmission Law , starting in January 2019, the allocation of the settlement payments will also include regulatedutilities.

Construction risk exposure mitigated by CHATE’s progress in attaining Rights of Ways (80% of the project area) and all “Nopending Action Certificates” (a prerequisite for the electrical concession for the remaining 20%). Celeo’s back-to-back agreement withCeleo Redes S.L. also reduces the risk that a material delay in DATE's construction works affects Celeo’s cash flows.

Overview of TransactionCeleo plans to use the proceeds raised from the issuance of the US$-Notes (Baa2 stable) and from the UF-Notes offering along withcash released from the reserve accounts related to the exiting project debt largely to repay AJTE’s and CHATE’s existing project debt,to fund the required projects accounts, including the pre-funding of CHATE’s remaining investments. Subject to certain restrictions,Celeo may also use any remaining amounts to make an equity contribution or a deeply subordinated unsecured loan to DATE and anextraordinary distribution to Celeo Redes Chile Limitada (Celeo’s direct parent company; see Exhibit 3).

Exhibit 1

Sources and UsesSources US$m % Total Uses US$m % Total

US$ - Notes 359.1 61.3% Existing USD Projects' Debt Repayment 220.1 37.6%

UF-Notes 215.5 36.8% Existing Projects' UF/CLP Debt Repayment 124.6 21.3%

DSRA Releases 11.5 2.0% Interests of Existing Debt 5.8 1.0%

Cash at hand - 0.0% Swap break costs 19.5 3.3%

O&M Reserve Funding 0.8 0.1%

Opex Payment Accounts 0.5 0.1%

DSRA Funding 15.0 2.6%

Transaction Fees & Expenses 20.1 3.4%

CHATE Investment Costs 24.7 4.2%

Available Cash from Refinancing 154.9

DATE Equity in Construction 25.0 4.3%

Cash net of Equity Investment 129.9 22.2%

Total Sources 586 100.0% Total Uses 586 100.0%

Source: Transaction Financial Model

Exhibit 2 summarizes AJTE's and CHATE's (Guarantors or Restricted Subsidiaries) assets, CoD and related capex. Celeo won AJTE 1 andCHATE under public auctions with the terms and conditions defined under the Perpetual Project Decrees while AJTE 2 is a mandatoryexpansion project. the Comision Nacional de Energia (CNE) may require both projects to perform certain expansions or upgrades to itstransmission line facilities (mandatory capex). Celeo’s third project, DATE, will remain for now outside of the scope of the Transaction,that is Unrestricted Subsidiary.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 28 April 2017 CELEO REDES OPERACION CHILE S.A.: New Issuer


Exhibit 2

Overview of Celeo Redes S.A. Assets

Asset Location (SIC) Technical Description Status Capital Expenditure

Alto Jahuel Circuit 1 ("AJTE 1") Alto Jahuel (south of Santiago) to Ancoa

substations

Voltage: 500 kV, Length: 256 km COD: Sept. 2015 USD 229.7mm

Alto Jahuel Circuit 2 ("AJTE 2") - Mandatory expansion Alto Jahuel (south of Santiago) to Ancoa

substations

Mandatory Expansion Works

Voltage: 500 kV, Length: 256 km

COD: Jan. 2016 USD 92.0mm

Charrua Circuit 1 ("CHATE") Charrua to Ancoa substations. Existing

substations are to be expanded

Voltage: 500 kV, Length: 198 km COD: September 2017 (expected) USD 175.0mm

Diego de Almagro ("DATE") Nuevo Diego de Almagro to Cumbres

substations (Atacama Region)

Voltage: 2x220 kV, Length: 52 km Under Development COD: Apr.

2019 (expected)

USD 90.3mm

(estimated)

Source: Projects Decrees and preliminary OM

Corporate ProfileHeadquartered in Santiago, Celeo Redes Operation Chile S.A. (Celeo) Celeo holds a 99.99% direct interest stake in AJTE, CHATE andDATE. Celeo is a subsidiary of Celeo Redes Chile Limitada (the Parent company) which is also majority-owned by Celeo Redes, S.L.(Sponsor).

Elecnor S.A. (Elecnor; unrated) is indirectly the majority shareholder while in 2014 the Dutch pension fund Algemene Pensioen GroepN.V. (APG) became the indirect minority shareholder (49%).

Exhibit 3

Organizational Structure

100% 100%

Spain 51% Netherlands 49%

Spain

99.99%

Chile 0.01%

100%

99.99%

0.01%

0.01%

99.99%

0.01%

0.01%

Notes Issuer Unrestricted Subsidiary

Restricted Subsidiaries Issuance Guarantors

Celeo Redes, S.L.

Celeo Redes Operacion Chile S.A.

("Issuer")

AJTE

APGElecnor S.A.

("Majority Shareholder") ("Minority Shareholder")

Celeo Concesions e

Inversiones, S.L.U.APG Infrastructure Pool 2012

CHATE

DATE

New Projects

(Celeo Redes Spain, "Sponsor")

("Parent Company")

Celeo Redes Chile Limitada

Source: Preliminary OM

Elecnor is materially involved, directly or indirectly via subsidiaries, in these Chilean projects. This involvement includes the projects’construction via Elecnor Chile S.A. (unrated) under the Engineering, Procurement, Construction Contracts (EPC). Elecnor guaranteesElecnor Chile’s obligations under CHATE's EPC based on a first demand corporate guarantee (equivalent to around US$39 million).

Following the repayment of the projects’ existing debt Celeo will assign to its parent company, Celeo Redes Chile Limitada, itsobligations under most of the contracts it executed with the projects. These include its obligations under the Operational andMaintenance (O&M) and the Management Services Agreements with AJTE and CHATE. The initial terms of the O&M Agreements



(following the projects’ commercial operation; see Exhibit 1) and Management Services Agreements are five and ten years, respectively.Unless terminated, all contracts are subject to be automatically renewed for one-year periods.

Importantly, Celeo Redes Chile Limitada will own and develop any new projects in Chile. However, Celeo will remain jointly andseverally liable for any breach by DATE of its obligations under its Project Decree, including commercial operation by the long-stop dateunder the Decree (November 2019). However, according to the back-to-back agreement executed with Celeo Redes S.L the latter isjointly and severally liable with Celeo for the compliance of all obligations resulting from the DATE Project Decree with the Chileanregulatory authorities.

Detailed Rating ConsiderationsLOW OPERATING RISK OF TRANSMISSION ASSETS WHICH ARE HELD IN PERPETUITY

The Baa2 rating factors in the low business risk profile of transmission assets, particularly during their operational period. This isevidenced by the high availability ratios in excess of 99% reported by AJTE 1 and AJTE 2 since they started operations in 2015 and2016, respectively. Our analysis also considers Elecnor's and its subsidiaries' experience operating transmission assets, and the fact thatCeleo will maintain (funded at financial closing) a 3-month O&M reserve account (almost US$0.8 million) which seems reasonable.The assets’ relatively short operational life (including CHATE’s after its commission expected this year) reduces the likelihood of majormaintenance investments requirements.

We further factor in that under the terms of the O&M Agreements the projects can pass-through to Celeo Redes Chile Limitada anylost revenues due to availability interruptions (which are not approved by the Chilean grid operator) in the form of discounts to theapplicable monthly O&M-fee. However, these monthly discounts are limited to 50% of the O&M fees, with any remaining discountscarried over to the following month. In addition, the total aggregated discount amount is capped at 12.5% of the annual O&M feewhich is relatively modest. We estimate, based on the transaction financial model, that the capped amounts represents less than US$0.5 million or 2% of all the projects' expected up-streamed cash flow to Celeo. In contrast, according to the Technical Adviser (TA)the monetary penalties range between around US$0.4 million (minor infraction) to US$8.2 million (severe infraction). However, the TAalso points out the fact that the authorities levy monetary fines only when the un-availability event results in an outage, a risk reducedby the redundancy that results from the n-1 configuration of the Chilean transmission system. Moreover, the new transmission law(Law 20.936) enacted in 2016 will limit, starting in 2020, these penalties to 5% of the project’s revenues.

CASH FLOWS VISIBILITY UNDERPINNED BY CREDIT SUPPORTIVE REGULATORY ENVIRONMENT...

AJTE 1 and CHATE were allocated under public auctions and their revenues are subject to the terms of their respective decrees.Therefore, they will receive a predictable availability-based revenue stream during a 20-year fixed period, so called fixed projectrevenues, a significant credit positive. We estimate that their aggregated revenues, following the expected commission of CHATE inSeptember 2017, will represent approximately 78% of the three projects’ total revenues in 2018.

According to the Chilean transmission regime, mandatory expansion, such as AJTE 2, were usually allocated to the currentconcessionaire. They are subject to tariff reviews called resettable project revenues. In contrast, according to the new transmissionlaw, should the Comision Nacional de Energia (CNE) require expansions or upgrades to AJTE’s or CHATE’s transmission line facilities(mandatory capex), after 2017 the EPC will be allocated under public auctions and subject to revenues that will also be fixed for 20-year periods, a credit positive.

Nevertheless, the Baa2 is premised on our expectation of AJTE 2’s visible cash flows. This considers the credit-supportive Chileanregulatory environment as well as a historical track-record of positive tariff review outcomes for other transmission companies. The10% discount rate (before tax) currently used in the calculation of the transmission systems’ annual remuneration (VATT) supports thisview. This compares well with the returns used to calculate other peers’ tariffs in the region, particularly considering Chile’s current lowcountry risk premium.

However, according to the new transmission law the next tariff reviews (starting in 2020) will use the Capital Asset Pricing Model(CAPM) to set the internal rate of return (IRR) which will be subject to a 7%-10% range. This creates some uncertainty surroundingthe applicable IRR for AJTE 2’s revenues (starting in 2020) as well as AJTE1’s and CHATE’s long-term cash flows because their tariffswill become subject to periodical reviews after the expiration of their 20-year fixed revenues period. Therefore, the Resettable Project



Revenues will increase after 2035 (AJTE 1) and 2037 (CHATE), respectively. On a positive note, we acknowledge the new IRR-rangesare defined on a post-tax basis. Moreover, the financial and tax model review confirms that the financial model assumes a return of11% (pre-tax) during the Fixed Revenue period and 8% (post-tax) for the tariffs that are subject to reviews. We do not consider theseassumptions excessively aggressive.

The projects’ annual tariffs (VATT) consist of (i) the AVI, that is an Annuity calculated on the assets’ Investment Value (VI) and theapplicable return as well as the (ii) O&M and administrative operating costs (COMA). As expected, given the transmission projects lowoperational costs we estimate the COMA represents less than 20% of the projects total income.

According to the new transmission law, following the 2020-2023 infrastructure study, AJTE 2’s AVI is anticipated to be also dividedinto (1) project income which Celeo anticipates will reflect the investments associated with AJTE 2 (around 80% of the capex) and (2)project expansion income which Celeo anticipates will correspond to the specific expansion works (remaining 20%). We understandthat the latter is subject to a four-year recovery period which helps to explain a temporary step-up in AJTE 2’ up-streamed cash flowsto Celeo in the 2020-2023 period but also an increase in Celeo’s scheduled principal payment under the Notes, a credit positive.

… AND ADJUSTMENTS MECHANISMS AMID SOME LIMITED OFF-TAKER CONCENTRATION RISK

The Baa2 rating also factors in that the revenues of all projects are subject to annual (AJTE 1 and CHATE) or monthly (AJTE 2)adjustments to reflect changes in the Chilean inflation rate and in the exchange rate CLP/USD, which enhance the projects’ cashflow visibility. As illustrated below the US$-linked and Chilean-linked cash flows also provide a natural hedge that mitigates Celeo'sforeign exchange risk. This considers that the AVI-payments account for most of the projects revenues. Moreover, the planned US$-Notes represent around 62% of the total debt with the Notes in UF (the Chilean inflation-indexed peso-denominated monetary unit),accounting for the balance. The Baa2 rating assumes that the indexation formula will remain similar over the long-term but also thatany significant changes would result in management's initiatives to prudently mitigate any resulting foreign exchange risk exposure.

Exhibit 4

Revenues Mix (CLP vs US$) based on the Project Decrees' Applicable Indexation Formula AJTE 1 & AJTE 2 CHATE

Portion of the AVI denominated in:

CLP 56% 0%

US$ 44% 100%

Portion of the COMA denominated in:

CLP 100% 100%

Source: Project Decrees and Preliminary OM

The Baa2 rating also factors in the projects’ exposure to some off-taker counterparty risk because the projects receive the paymentsrelated to their transmission services (embedded in the power generation costs) from the unregulated power generation companies(IPPs). However, the Baa2 rating acknowledges the satisfactory credit profile of the projects’ key IPP-counterparties, includingEnel Generacion S.A. (Baa2 stable), AES Gener S.A. (Baa3 stable) and Colbun S.A. (unrated). The rating also factors in that the newtransmission Law will expand, starting in January 2019, the allocation of the settlement payments which will also include regulatedutilities, for example, Chilectra S.A. and Chilquinta S.A., subsidiaries of Enel Chile S.A. (unrated) and Sempra Energy (Baa1 stable),respectively.

HIGH LEVERAGE AND LONG-TERM CASH FLOWS UNCERTAINTY CONSTRAIN RATING BUT AMORTIZING DEBTSTRUCTURE LIMITS CREDIT RISKS

The Baa2 rating is constrained by the projects’ high leverage and the fact that the planned 30-year Notes will mature in 2047. Moody’scalculates that 66% and 59% of the principal debt (considering the inflation-indexed amounts due under the UF-Notes) will remainoutstanding after the expiration of the 20-year fixed tariff period in 2035 for AJTE 1 and in 2037 for CHATE (assuming its commissionin September 2017).

As mentioned earlier, these assets will then also become subject to tariff reviews. In Chile, the rate base used to calculate the tariffs isbased on the asset investment value (VI) which, unlike most global jurisdictions, does not reflect the assets’ depreciated value. The VI in



Chile is based on their value of new replacement (VNR). The VNR represents the investments required to build a complete new systemwhich somewhat diminishes the long-term visibility of the transmission assets’ VI and cash flows subject to tariff reviews, particularlyin 20-years. For example, a significant change in technology that reduces the value of the transmission assets could also result in anadjustment downward of the assets VI. Thus, given the remaining amortization schedule, the credit risk increases during the Notesfinal ten years, particularly if the projects’ tariffs end up being materially lower than anticipated. This is especially the case given theamortization schedule which is heavily back-end loaded.

However, we acknowledge that the debt amortization profile has been designed to target a minimum 1.25x for cash flows subject tofixed tariffs (that is, for AJTE 1 pre-2035 and CHATE pre-2037) and 1.35x time DSCR for cash flows subject to resettable tariffs (that isAJTE 2 starting in 2020 and AJTE 1/CHATE after 2035/2037, respectively). Importantly, the Baa2 rating also considers the long usefullife of transmission assets and that these 500KV transmission assets are held in perpetuity. The rating also assumes that they willremain, over the long term, key pieces of infrastructure of the Chilean transmission system. The map included in Appendix III depictsthe project’s strategic routes and substations in terms of demand and generation pockets. For example, the Alto Jahuel-Ancoa hub(AJTE 1 and 2) is located south of Santiago while several of Enel Generacion Chile’s key hydro-electric plants inject their power outputinto Charrua.

Moreover, as illustrated in the section below we also consider that a break-even scenario in the financial model resulting in a 1.0 timeDSCR would need nearly a 24% reduction in the projected VI, which helps alleviate credit concerns given the type of asset and theirexpected long-term importance. The financial model assumes an inflation-linked growth of the VI over time. Specifically, the financialmodel assumes Chilean-inflation to be 3% through 2019 and 3.5% 2020 onward. Similarly, the base case assumes US$-inflation of1.8% 2017-18, a step-up to 2% in 2019 and then 2.25% 2020 onward. The TA also opines that the financial model’s calculations of theprojects’ annual revenues based on the proxy-VI is consistent with CNE's methodology.

CONSTRUCTION RISK EXPOSURE BUT SOME MECHANISM MITIGATES THE RISK

The Baa2 rating incorporates CHATE’s remaining construction risk exposure with its expected commission in September 2017, CoD. Theproject reports an overall construction progress of 95%, including 98% for the substations and 88% for the transmission lines.

On a negative note, the anticipated CoD is nine months after the initial completion date of January 2017 under the terms of theturn-key, lump sum EPC-contract executed with Elecnor Chile S.A. (unrated; contract price: US$157.4 million excluding VAT). Weunderstand that the challenges attaining the Rights of Way have largely caused these delays, yet significant progress has been made.For example, CHATE has obtained easements based on voluntary agreements from landowners for approximately 80% of the projectarea while it has also attained all “no pending action certificates” for the remaining 20% of the project area. This is important becausethe certificates are issued by the Chilean authority in charge of supervising the electricity market, and are a pre-requisite to obtainingan electrical concession, a key milestone.

The Baa2 rating also acknowledges that Celeo’s liquidity will allow it to cope with a delay of at least half a year compared to thecurrent CoD. Our liquidity analysis further considers that the EPC contractor, Elecnor Chile S.A., became liable to make LiquidatedDamages ($30k/day) to Celeo in January 2017 while CHATE will be also able to pass-through to Elecnor Chile S.A. any penalties(around $95k/day) that the Chilean authorities could impose if CHATE fails to complete the project before February 25, 2018, thelong-stop date under the Decree. Elecnor Chile’s obligations are capped at 25% of CHATE’s EPC contract (US$157.4 million). We alsounderstand that these payments are being currently levied as a reduction of the Elecnor Chile’s EPC contract.

The rating factors in that the EPC-contractor’s obligations are not supported by any third-party financial arrangement, a creditweakness but rely instead on Elecnor S.A. (unrated), the majority indirect shareholder of Elecnor Chile S.A. as well as of Celeo. WhileElecnor’s high financial leverage limits its standalone credit quality, Celeo’s Baa2 rating assumes that Elecnor does not face materialimmediate liquidity challenges that would diminish its ability to satisfy the first demand corporate guarantee for up to 25% of CHATE’sEPC price (that is $39.25 million) which has been provided as part of this transaction. Nevertheless, Celeo’s Baa2 rating recognizes alow likelihood that the corporate guarantee will be called given the relatively low construction risk associated with transmission assetsand the issued “No pending actions certificate”.



As mentioned earlier Celeo remains liable for the compliance of all obligations resulting from the DATE Project Decree with the Chileanregulatory authorities despite DATE's current Unrestricted Subsidiary status, a credit negative. However, the rating factors in thatpursuant to the back-to-back agreement executed with Celeo Redes S.L (the Sponsor) the latter is jointly and severally liable with theIssuer to meet those obligations. Pursuant to this arrangement Celeo Redes S.L. will indemnify and reimburse Celeo (within 15 daysfrom the payment notification date) all amounts that Celeo is required to pay under the terms of the Decree, except if the paymentswere made from funds available in Celeo’s USD Distribution Account or an Unrestricted Account. The involvement of Celeo Redes S.L.(see exhibit 3) is credit positive, particularly considering APG’s minority interest in the Sponsor.

CREDIT SENSITIVITY ANALYSIS SHOWS RESILIENCE TO THE DOWNSIDES, SUPPORTING AN INVESTMENT GRADERATING

Based on the transaction’s financial model, we have run a number of key sensitivities, including break-even scenarios based on materialincreases in the O&M expenses as well as lower than anticipated rates of inflation (US and Chilean) and Value of Investments (VI). Theresults show Celeo’s cash flows resilience to downside scenarios.

Exhibit 5

Sensitivity Analysis Shows Resilience to DownsidesSensitivities % change/assumptions ADSCR Average ADSCR Minimum Date of Minimum

Management base case pre-2035 Inflation: CLP 3% 2017-20, 3.5% 2020

onward, USD 1.8% 2017-18, 2% 2019,

2.25% 2020 onward

1.27 1.25 2019

Management base case 2035 onward Inflation: CLP 3.5%, USD 2.25% 1.41 1.28 2035

Management downside case 20% O&M + 6m delay + 20% VI reduction 1.21 1.11 2038

Break-even O&M 145% 1.20 1.01 2019

Break-even CHATE's construction delay 11-month delay 1.32 1.13 2018

Break-even reduction in VI 24% 1.16 1.03 2041

Break-even Inflation USD & CLP Inflation: 0% 1.16 1.00 2046

Source: Transaction Financial Model

According to the insurance advisor’s report Celeo Redes Chile Limitada (the parent) will provide, after financial close, the liabilitypolicy covering the operational projects. The report states that there are currently separate, stand-alone property insurance policies forCHATE for the remainder of the construction period (including full replacement property damage: US$115.3 million ) and AJTE projects(including 12 months Business interruption - AJTE 1: US$16.8 million; AJTE 2: US$26.1 million). Upon CHATE's completion the projectswill be insured under the same property insurance policy.

Rating OutlookThe stable outlook reflects the expectation that CHATE will be completed largely on budget before February 25, 2018, the projectsDecree’s long-stop date. It also assumes that Celeo’s cash flows will not be negatively impacted from challenges during DATE’sconstruction period because all resulting payment obligations will be fully borne by Celeo Redes Spain under the back-to-backagreement. The stable outlook also assumes AJTE’s and CHATE’s high availability such that Celeo’s financial performance will begenerally consistent with our base case expectations, which assumes a DSCR of at least 1.25x DSCR during the Fixed revenues periodand 1.35x after 2037, when the tariffs of all projects will become resettable.

Factors that Could Lead to an UpgradeAn upgrade of the rating is unlikely over the near-to medium term given Celeo’s high initial leverage. Over the long-term, stronger thanexpected financial metrics that result in a DSCR exceeding 1.40x consistently, would exert upward rating pressures.

Factors that Could Lead to a DowngradeThe rating could experience negative pressure in the event of material delays during the tail-end of CHATE’s construction works,particularly beyond February 2018 and/or cost overruns, particularly if they are not successfully covered under Elecnor’s corporateguarantee. Downward pressure would also develop if AJTE’s and CHATE’s operations are weaker than currently anticipated and/or ifCeleo’s financial performance is materially different than anticipated, such that the Fixed and Resettable DSCRs remain below 1.25times and 1.35x, respectively, on a sustainable basis.



Appendix I - Scoring under the Generic Project Finance MethodologyWe assess Celeo's credit quality relative to the Generic Project Finance Methodology published in December 2010. The indicatedrating under this methodology considers Celeo's financial performance based on management's base case using forecasted 5-yearaverages. As depicted below, Celeo's indicated rating is consistent with the assigned rating of Baa2. Please see the Credit Policy page onwww.moodys.com for a copy of this methodology

Exhibit 6

Generic Project Finance Methodology ScorecardCeleo Redes Operacion Chile S.A.

Factor Subfactor Score Metric

1. Long Term Commercial Viability & Competitive Position a) Competitive position A

2. Stability of Net Cash Flows a) Predictability of Net Cash Flows Baa

b) Technology & Operating Risk A

3. Exposure to Event Risk a) Exposure to Event Risk A

4. Financial Metrics a) Average Annual Debt Service Coverage Ratio Ba 1.26x

b) FFO/Total Adjusted debt B 3.40%

c) Breakeven Analysis A

Notching Considerat ions Notch

1 - Liquidity 0

2 - Project Financing Features 0

3 - Refinancing Risk 0

4 - Loss Given Default (%) 0 35%

Scorecard Indicated Rat ing: Baa2

Source: Moody's Investors Service



Appendix II - Summary of the Financial StructureThe Noteholders benefit from a covenant and security package that incorporates credit-enhancing features typically seen in projectfinancing transactions. This Appendix summarizes key elements of the Notes covenants and collateral package.

The terms of the Notes are subject to the terms of the Base and Supplemental Indentures entered between Celeo, AJTE, CHATE, andthe US$-Notes trustee. In addition, the rights of the Noteholders with respect to the collateral package are subject to the terms of theIntercreditor Agreement, the Collateral Accounts Agreement and the other Security Documents securing the Notes.

Restrictive Financial Covenants

» The Notes include Restricted payment test, based on 12-month forward and backward-looking DSCR of 1.15x rising to 1.20x (on aforward looking basis) after January 2036.

» Celeo's ability to incur incremental indebtedness to fund mandatory capex (in excess of US$25 million) as well as to designateany Unrestricted Subsidiary (for example, DATE) to be a Restricted Subsidairy is subject to certain covenants, including thedemonstration of a projected Fixed DSCR (during the fixed income period) of 1.25x and Resettable DSCR (for revenues subject totariff reviews) of 1.35x.

Events of Default include

» Non-payment of principal 3 or more business days, of interest or additional amounts, if any, for 5 or more business days, or oftaxes and fees for 15 or more business days;

» If CHATE does not enter operations by February 28, 2018, unless Celeo demonstrates a (i) projected Fixed DSCR and a projectedResettable DSCR for the remainder of the life of Notes that exceed 1.25x and 1.35x, respectively, and (ii) the TA certifies that thereare sufficient funds for CHATE to attain commercial operations before CHATE Decree's drop dead date, that is February 25, 2020;

» Breach of material obligations under any key project document, except if the applicable Document is an O&M Agreement or anEPC-Agreement which is replaced within 60 days;

» Unenforceabilty/invalidity of finance documents and/or security;

» Issuer's or Restricted Subsidiary's repudiation its financial obligations under the documentation;

» Cross-default of any other financial obligation (in excess of US$5 million) of the Issuer or Restricted subsidiary which continuesbeyond the grace period;

» Abandonment;

» Any Expropriatory Action that results in a Material Adverse Effect;

» In case of judicial proceedings initiated by/against the Issuer or its Restricted Subsidiary (stay over 45 days);

» failure to satisfy a payment (in excess of US$5 million) that result from a final non-appealable judgement and remains unsatisfiedfor over 60 consecutive days;

» revocation/termination of any Governmental Approval necessary for the Projects' construction, O&M; unless cured within 60 daysor has no Material Adverse Effect;

» A total loss that has a Material Adverse Effect;

» Misrepresentation in any Financing Document or Project Document that causes a Material Adverse Effect;

» Any security interest or other lien meant to be created by or under the Senior Security Documents in the Collateral fails or ceasesto be a validly perfected first priority security interest or a valid transfer of right as applicable in favor of the applicable CollateralAgent.



Appendix III - Strategic location of AJTE and CHATEThis partial map of the Chilean electricity system illustrates the strategic location of the projects' 500KV tranmission assets. Theyinterconnected electricity generation fleet (including Enel Generacion Chile's hydroelectric plants) with key pockets of demand(including Santiago).

Location of the The transmission projects - Alto Jahuel-Ancoa-Charrua hubs

Source: Chilean Electric System Operator (Coordinador Electrico Nacional)



Moody's Related ResearchGeneric Project Finance Methodology (December 20, 2010)


https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_127446


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