New York, NY, Jan. 17, 2001 — Moody’s Investors Service has placed the senior unsecured notes of Gener S.A., rated Baa2 under review for possible downgrade.

Separately, Moody’s has confirmed the senior secured debt ratings of Empresa Electrica Guacolda, S.A. (Guacolda) at Baa3, a subsidiary of Gener. The review for downgrade on Gener’s securities follows

The AES Corporation’s (AES) completion of a tender offer for 96.5% of Gener’s common stock equal to approximately U.S.$1,440 million, which is initially being financed, in part, with approximately $400 million of debt. Moody’s expects that the incremental acquisition debt will either be placed at the Gener level directly, or at an intermediate holding company whose single source of cash flow would be the cash flow from Gener and its subsidiaries.

In either case, Gener would face an equivalent amount of downward rating pressure, as its cash flows would have to service the same amount of debt. Prior to the AES transaction, Gener’s rating of Baa2 carried a negative outlook, due largely to weak operating results from its investments in both Argentina and Colombia.

The rating confirmation of Guacolda at Baa3 reflects the existence of long-dated contracted revenue with mining customers, which provides a high degree of cash flow certainty for creditors at Guacolda as well as the existence of a dividend restriction test which limits the payments of dividends to the parent.

The scope of the Gener review will include the financial and strategic impact that AES’ ownership will have on the company, the potential sale of Gener’s Argentinean assets to reduce its debt burden, and the potential implementation of dividend restrictions at the Gener level.

Headquartered in Santiago, Chile, Gener is principally an electric generation company with investments principally in Chile, Colombia, Argentina, and Dominican Republic.

Headquartered in Alexandria, Virginia, AES is a leading global power company comprised of competitive generation, distribution and retail supply businesses. AES generating assets include interests in one hundred thirty-seven facilities totaling over 49 gigawatts of capacity. Its electricity distribution network has over 920,000 km of conductor and associated rights of way and sells over 126,000 gigawatt hours per year to over 17 million end-use-consumers.