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AES Red Oak LLC Jan 08
Standard & Poors, Jan 2008
Abstract
The ratings on power provider AES Red Oak LLC reflect historically low debt service coverage, a continuing dispute with a counterparty, and merchant risk during the last eight years of the bond term. These weaknesses are mitigated by a 20-year power purchase agreement (PPA) that mitigates market exposure. Without the PPA, the project would operate under merchant conditions and may be unable to service its debt. If the project could resolve its disputes and achieve superior operating and financial performance, Standard & Poor's Ratings Services' rating on AES Red Oak would still be constrained three notches above its parent, The AES Corp. (AES; BB-/Stable/--), based on our project finance methodology. AES Red Oak is a combined-cycle, natural gas-fired generation station...
Companies mentioned in this report are: AES Red Oak LLC,Indianapolis Power & Light Co.,IPALCO Enterprises Inc.,AES Corp. (The),AES Gener S.A.,AES China Generating Co. Ltd.,C.A. La Electricidad De Caracas ,AES Sul Distribuidora Gaucha de Energia S.A.,AES CHIVOR & CIA S.C.A. E.S.P.
Action: Review
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Full Analysis
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