Fitch downgrades AES Tiete certificates

Credit ratings agency Fitch Ratings has downgraded the AES Tiete Grantor Trust certificates to CC from B- rating watch negative, Fitch said in a statement Wednesday. AES Tiete is a Brazilian generation subsidiary of US power company AES, and has 2,651MW installed capacity in Sao Paulo state. The downgrade reflects near-term concerns that negotiations between the issuer (AES IHB Cayman) and certificate holders regarding debt service payments in December 2003 and possibly June 2004 will result in either a payment default on December 15, 2003 or a distressed debt exchange of the certificates, Fitch said. Fitch does not expect IHB to be able to meet all of its financial obligations scheduled in December 2003, which include the replenishment of the debt service reserve account (DSRA) of about US$22mn, the repayment of approximately 70mn reais of inter-company debt with AES Tiete, the operating company, and scheduled interest and principal of US$22mn due under the certificates. To read Fitch's full statement, paste the following link in your browser: http://www.bnamericas.com/rc_search_detail.xsql?id_documento=42578&Tx_idioma=I