AES Drax Completes $1 Billion Bond Financing; Proceeds from bond issues will refinance existing project debt.

Business Editors

ARLINGTON, Va.--(BUSINESS WIRE)--Aug. 3, 2000

The AES Corporation (NYSE:AES) announced today that its subsidiaries, AES Drax Holdings Limited and AES Drax Energy Limited, have issued approximately $1 billion of non-recourse project bonds to refinance outstanding debt at the Drax Power Station, located in North Yorkshire, England.

AES Drax Holdings Limited issued (pound)200 million of 9.07% bonds due in 2025 and $302 million of 10.41% bond due in 2020. The dollar tranche will be swapped into sterling at an effective coupon of approximately 9.25%. The proceeds from these investment grade bonds are being used to refinance partly the original bank debt put in place at the time of the acquisition of Drax by AES in November 1999. The sale of these bonds was managed by Goldman Sachs, who also acted with Deutsche Bank as co-global coordinators for the financing.

AES Drax Energy Limited issued (pound)135 million of 11.25% bonds and $200 million of 11.50% bonds due in 2010. The dollar tranche will be swapped into sterling at an effective coupon of approximately 10.45%. The proceeds from these high yield bonds are being used to refinance a (pound)250 million bridge loan, which has been in place since the acquisition of Drax by AES. The sale of these bonds was managed by Donaldson, Lufkin and Jenrette and Goldman Sachs.

Michael Armstrong, Group Manager of AES Electric, commented, "We are thrilled with the outcome of this unprecedented financing. The Drax refinancing is the first bank/bond project financing in the UK, the largest combined power project bond offering and the largest subordinated project bond ever issued. This extremely complex financing would not have achieved such a successful outcome without the support of many professionals and we would like to thank in particular Goldman Sachs and Deutsche Bank, as well as the 50 banks in the Drax syndicate which supported this refinancing."

Dennis W. Bakke, President and Chief Executive Officer, stated, "We are pleased with the interest shown by bond investors in this type of combined bond and bank financing. The bond issues at Drax significantly extend the average maturity of the debt, and thereby provide a better match between the term of the debt and the life of the asset."

AES is a leading global power company comprised of competitive generation, distribution and retail supply businesses in Argentina, Australia, Bangladesh, Brazil, Canada, China, Dominican Republic, El Salvador, Georgia, Hungary, India, Kazakhstan, the Netherlands, Mexico, Pakistan, Panama, the United Kingdom, the United States and Venezuela.

The company's generating assets include interests in one hundred and thirty two facilities totaling over 47 gigawatts of capacity. AES' electricity distribution network has over 920,000 km of conductor and associated rights of way and sells over 126,000 gigawatt hours per year to over 17 million end-use customers. In addition, through its various retail electricity supply businesses, the company sells electricity to over 154,000 end-use customers.

AES is dedicated to providing electricity worldwide in a socially responsible way.

These securities have all been sold and this announcement appears as a matter of record only. These securities have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such Act.

For more general information visit our web site at www.aesc.com or contact investor relations at [e-mail]. The list aes-pr-announce is an automated mailing list and can be found on the investing page of our web site. Those who subscribe to this list will receive updates when AES issues a press release.