AES Responds To S&P Downgrade.

Business Editors

ARLINGTON, Va.--(BUSINESS WIRE)--June 6, 2002

The AES Corporation (NYSE:AES) responded today to Standard & Poor's announcement that it has lowered its corporate credit and senior unsecured debt ratings on AES.

"While we are disappointed with today's action, we are pleased that S&P has noted the significant improvement in our liquidity position since the beginning of the year and also acknowledged the fact that we are not in the trading business and consequently have no trading liabilities and no issues arising from the recent FERC inquiries," said Barry Sharp, Chief Financial Officer.

"Our current parent liquidity is over $450 million, and the cash and cash equivalents at our subsidiaries is approximately $1.2 billion. As S&P notes AES's liquidity is not seriously affected, and the associated triggers with this downgrade amount to less than $60 million of Letters of Credit. These Letters of Credit are primarily to cover payments for construction projects that were already included in our forecast. We expect to generate $1.25 billion of parent operating cash flow in 2002. We have reduced our discretionary capital expenditures by $500 million, and have planned reductions in operating costs of $200 million. In addition, asset sales and financings already announced will add an additional $800 million. In short, we are continuing to achieve the commitments that we made to our investors," Mr. Sharp stated.

AES is a leading global power company comprised of competitive generation, distribution and retail supply businesses in Argentina, Australia, Bangladesh, Brazil, Cameroon, Canada, Chile, China, Colombia, Czech Republic, Dominican Republic, El Salvador, Georgia, Germany, Hungary, India, Italy, Kazakhstan, the Netherlands, Nigeria, Mexico, Oman, Pakistan, Panama, Qatar, South Africa, Sri Lanka, Tanzania, Uganda, Ukraine, the United Kingdom, the United States and Venezuela.

The company's generating assets include interests in 177 facilities totaling over 59 gigawatts of capacity. AES's electricity distribution network has over 727,000 km of conductor and associated rights of way and sells over 108,000 gigawatt hours per year to over 16 million end-use customers.

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

This news release may include forward-looking statements. Actual events and results may differ materially from those projected. Factors that could affect actual results are discussed in AES's filings with the Securities and Exchange Commission, and readers are encouraged to read those filings to learn more about the risk factors associated with AES's businesses.

For more general information visit our web site at www.aes.com or contact investor relations at [e-mail].