7 June 2002 – The AES Corporation responded today to Standard & Poor’s announcement that it has lowered its corporate credit and senior unsecured debt ratings on AES.
“While we are disappointed with today’s action, we are pleased that S&P has noted the significant improvement in our liquidity position since the beginning of the year and also acknowledged the fact that we are not in the trading business and consequently have no trading liabilities and no issues arising from the recent FERC inquiries,” said Barry Sharp, cfo.
“Our current parent liquidity is over $450m, and the cash and cash equivalents at our subsidiaries is approximately $1.2bn. As S&P notes AES’s liquidity is not seriously affected, and the associated triggers with this downgrade amount to less than $60m of Letters of Credit. These Letters of Credit are primarily to cover payments for construction projects that were already included in our forecast. We expect to generate $1.25bn of parent operating cash flow in 2002. We have reduced our discretionary capital expenditures by $500m, and have planned reductions in operating costs of $200m. In addition, asset sales and financings already announced will add an additional $800m. In short, we are continuing to achieve the commitments that we made to our investors,” Sharp stated.
AES is a leading global power company comprised of competitive generation, distribution and retail supply businesses in Argentina, Australia, Bangladesh, Brazil, Cameroon, Canada, Chile, China, Colombia, Czech Republic, Dominican Republic, El Salvador, Georgia, Germany, Hungary, India, Italy, Kazakhstan, the Netherlands, Nigeria, Mexico, Oman, Pakistan, Panama, Qatar, South Africa, Sri Lanka, Tanzania, Uganda, Ukraine, the UK, the US and Venezuela.
The company’s generating assets include interests in 177 facilities totaling over 59 GW of capacity. AES’s electricity distribution network has over 727 000 km of conductor and associated rights of way and sells over 108 000 GWh per year to over 16m end-use customers.