The rating on The AES Corp. reflects the risks of its reliance on substantive distributions from jurisdictions where considerable regulatory and operating uncertainties exist to support its parent-level debt, some exposure to merchant power markets, and a highly leveraged, although improving, balance sheet. Although the level of distributions to AES from operating subsidiaries seems to have stabilized at around $1 billion, some of those distributions are very speculative, including fairly sizable distributions in 2004 from Venezuela ($77 million), Nigeria ($33 million), and Argentina ($39 million). Also, 2004 distributions included a one-time distribution of about $100 million from subsidiary AES Gener S.A., representing the release of trapped cash. These risks are tempered by the diversification of AES' portfolio, a stable base...
Companies mentioned in this report are:
- The AES Corp.
- Indianapolis Power & Light Co.
- AES Gener S.A.
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.
This product consists of a Summary Analysis: Bi-annual (at least). An abbreviated analysis containing Standard & Poor's issuer credit ratings as of the time the article was published. The analysis includes a rating rationale - the basis on which the rating was assigned - and an outlook section if the issuer is not on CreditWatch. Financial statistics are not included. SHOW LESS READ MORE >