CORRECTION: IPALCO Placed On Watch Negative By Fitch; IPALCO's Implied Senior Unsecured Debt Rating was Incorrectly Stated as `AA' in a Prior Release; The Correct Rating is `AA-'.Business Editors NEW YORK--(BUSINESS WIRE)--July 17, 2000 Fitch has placed its ratings of IPALCO IPALCO Indianapolis Power and Light Company Enterprises, Inc. (IPALCO) and Indianapolis Power & Light Company (IP&L) securities on Watch Negative due to the planned sale of IPALCO to The AES Corporation (AES). Fitch currently rates IPALCO's implied senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. `AA-' and its commercial paper `F1+'. Fitch also rates Indianapolis Power & Light Company's first mortgage bonds and secured pollution control revenue bonds `AA+'; its unsecured pollution control revenue bonds `AA'; preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. `AA-'; and commercial paper and variable rate mode noncallable Noncallable Securities that cannot be called by the issuer prior to maturity. Notes: Noncallable securities include preferred stocks and bonds. These securities usually offer lower yields to investors due to their reduced risk. pollution control revenue bonds `F1+'. The Watch Negative status reflects IPALCO's sale to an entity with lower ratings of fixed income securities. Fitch rates (and has affirmed as part of the purchase announcement) AES' $850 million corporate revolving bank loan `BB+'; $950 million in senior unsecured notes `BB+'; $1.1 billion in senior subordinated notes `BB'; $150 million convertible junior subordinated debentures `B+'; and $1.6 billion of term convertible and trust convertible securities, issued by AES Trusts I, II, III and VII `B+'. The transaction is valued at approximately $3 billion and is expected to be completed in early 2001. The purchase, accounted for as a pooling-of-interests, will consist of approximately $2.15 billion in AES stock and the assumption of $890 million of IPALCO debt and preferred stock by AES. IPALCO will be merged into a special purpose subsidiary of, and then become a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of AES. The acquisition is subject to approval by IPALCO shareholders and various regulatory authorities. IP&L is an electric utility serving 420,000 customers in Indianapolis, Indiana. IP&L is the largest wholly owned subsidiary of IPALCO. Fitch is an international rating agency that provides global capital market investors with the highest quality ratings and research. Dual headquartered in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and London with a major office in Chicago, Fitch rates entities in 75 countries and has some 1,100 employees in more than 40 local offices worldwide. The agency, which is a combination of Fitch IBCA IBCA International Braille Chess Association IBCA Institute of Burial and Cremation Administration IBCA Integrated Business Communications Alliance IBCA International Barbeque Cookers Association IBCA Department of Interior Board of Contract Appeals and Duff & Phelps Credit Rating Co., provides ratings for Financial Institutions, Corporates, Structured Finance, Insurance, Sovereigns and Public Finance Markets worldwide. |
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