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Bulletin: Potential Nationalization Of AES Utility In Venezuela Harms Credit Quality Jan 07
Standard & Poors, Jan 2007
Abstract
NEW YORK (Standard & Poor's) Jan. 10, 2007--Standard & Poor's Ratings Services said today that Venezuelan President Hugo Chavez announced plans to nationalize Venezuela's electricity sector is negative for AES Corp.'s (BB-/Stable/--) credit quality but does not affect its ratings or outlook at this time. AES is the parent of Electricidad de Caracas (EDC; B/Watch Neg/--), a regulated electricity business in Venezuela. The details of Mr. Chavez's plans are not clear at this time, but, in the extreme event that EDC is expropriated without compensation, we estimate that AES would lose an asset that has recently provided about $80 million to $100 million of annual distributions, or a significant 7%-9% of expected parent operating cash flow. Our assessment of AES...
Companies mentioned in this report are: AES Corp. (The),C.A. La Electricidad De Caracas
Action: Bulletin
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: News
This product is a is a brief one-page announcement of no more than 500 words with a quote from the analyst. It is media and investor focused with no accompanying commentary article.
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