Fitch Rates AES Corp.'s $2 Billion Senior Unsecured Notes 'BB/RR1'.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has assigned a 'BB/RR1' rating to AES Corporation's (AES) $2 billion issuance of senior unsecured notes maturing 2015 and 2017. AES' long-term Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) is rated 'B+' by Fitch. The Rating Outlook is Stable. The increase of the debt offer from $500 million does not change Fitch's view of the transaction as the pre-funding of growth capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. and debt refinancing Refinancing An extension and/or increase in amount of existing debt. at a time of uncertain capital markets. Fitch's rating is still based on its expectation that AES will use the proceeds during the next six months to pay down debt and to invest in several different generation projects. The company has $415 million of debt maturing in 2008, and a variety of debt with higher coupon rates Coupon rate In bonds, notes, or other fixed income securities, the stated percentage rate of interest, usually paid twice a year. than the new debt issued today. In addition, the company has several projects nearing completion that should create sufficient cash flows to offset the additional incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. debt and interest expense and allow the company to maintain relatively stable credit metrics. The ratings of AES reflect the high degree of parent-company recourse debt, the structural subordination of that debt to project level debt, and the reliance on distributions from its subsidiaries for parent-company debt service. Offsetting, in part, the company's financial risk is the solid base of utility and contracted generation as well as the diversity of cash flow sources. The current Stable Rating Outlook reflects Fitch's expectation that credit metrics will stay within parameters for the current rating. AES is one of the world's largest global power companies, with 2006 revenues of $11.6 billion. With operations in 28 countries on five continents, the company is active in the generation, transmission and distribution of electricity. The company controls more than 42,000 mw of capacity. Fitch's Recovery Ratings (RR) are a relative indicator of creditor recovery prospects on a given obligation within an issuers' capital structure in the event of a default. A broad overview of Fitch's RR methodology as it relates to specific sectors can be found at www.fitchratings.com/recovery. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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