Correction: Fitch Affirms Electricidad de Caracas at 'B+'.

NEW YORK -- (This is an amended version of a release that went out yesterday: in the first paragraph, the long-term national rating is actually 'AA+', not 'AA-'.)

Fitch Ratings-Chicago-October 19, 2005: Fitch Ratings has affirmed the international foreign currency long-term and local currency ratings of C.A. La Electricidad de Caracas (EDC) at 'B+' and 'BB-', respectively. The foreign currency rating of EDC is constrained by the Venezuelan sovereign rating of 'B+'. All ratings maintain a Stable Rating Outlook. Likewise, Fitch also assigns a long-term national rating for EDC at 'AA+(ven)' and a short-term national rating at 'F-1+(ven)'.

The assigned ratings reflect the company's position as the largest private electric utility company in Venezuela and as a low-cost, vertically integrated company. The company is well-positioned to operate in the evolving Venezuelan electricity market. EDC's long history as a profitable, reliable private entity helps provide comfort in the company's and management's ability and willingness to meet its financial obligations in the event of material adverse events. The ratings also incorporate the many economic and political challenges that have affected the credit quality of both the company and Venezuelan sovereign.

EDC continues to be successful in repaying and rolling over maturing debt obligations despite the imposition of foreign-exchange controls since February 2003. In October 2004, EDC issued $260 million of 10-year senior unsecured notes in the international markets with the proceeds used to prepay short-term debt. With the bond issuance the company has successfully extended the average life of its debt to 5.08 years at June 2005 from 1.79 years as of June 2004. Upcoming maturities should be manageable. The company faces maturities of VEB65.9 billion in 2005 and VEB161 billion in 2006, which are expected to be adequately met with operating cash flow, new debt issuances, and rollovers with existing creditors.

In addition to demonstrating continued access to financing, both locally and abroad, EDC has received approval from the Comision de Administracion de Divisas (CADIVI), the federal entity that controls access to foreign currency, to make U.S. dollar payments in 2003, 2004 and 2005 to meet all of its obligations to lenders and insurance providers and for imports. EDC also received CADIVI approval to obtain dollars for the payment of dividends in 2004 and 2005. Despite EDC's continued success in receiving U.S. dollars, liquidity concerns persist given the tumultuous sovereign environment and the discretionary process of CADIVI.

EDC is sensitive to changes in the economic policy and reliance on government approval of tariff adjustments. This exposure is evident in the company's June 2005 financial results, which report a 5.8% decrease in revenues due to high hydro-generation and less energy sales to the National Interconnected System, and the lag in tariff adjustments relative to inflation. EDC has not received part of its tariff adjustment since early 2004 (19 months). The lack of tariff adjustment has been partially compensated by demand growth of approximately 6%. With local elections behind them, management expects to receive tariff increases during the coming months; however, 2006 is a presidential election year, and Fitch believes adjustments during this period are unlikely.

Recently reported credit-protection measures are solid for the current rating category but could decline if the currency and economic pressures continue without offsetting increases in tariffs. EDC reported stable EBITDA to net interest coverage of 4.4 times (x) through June 2005 compared with June 2004, which is considered strong for the rating category. The comparable coverage ratio between the periods primarily reflects lower average interest rates and a 25% reduction in total debt at June 30, 2005, which was offset by lower revenues, and the devaluation in the first quarter of 2005. Total debt declined to US$542 million from US$726 million, resulting in a debt to EBITDA ratio of approximately 2.0x as of June 2005.

To date, EDC has illustrated its financial flexibility to absorb various external shocks associated with operating in volatile emerging markets. EBITDA to interest is expected to increase slowly over the coming years. Debt levels are expected to fluctuate periodically, as the company issues debt and repays maturing debt as opportunities permit. On average, debt should remain relatively stable, as the company plans to maintain its capitalization structure and as capital expenditures are financed primarily with internally generated funds.

The company has begun the development of the La Raisa power project which will add 200 MW of capacity to EDC's generation portfolio with an internally funded investment of US$75 million, which should support growth in revenues and cash flow and improve the company's credit protection measures over the medium term.

EDC is the largest private-sector electric utility in Venezuela and generates, transmits, distributes, and markets electricity primarily to metropolitan Caracas and its surrounding areas. The AES Corporation acquired 87% of EDC in June 2000 through a public-tender offer.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.