S&P: AES Eastern Energy up to stable

Standard & Poor's said it affirmed its BB+ rating on AES Eastern Energy LP's $550 million pass-through certificates and $75 million working capital facility and revised its outlook to stable from negative.

S&P said the rating action follows the company's settlement of the environmental issues with New York State Department of Environmental Conservation regarding the Greenidge and Westover plants, as well as a review of the project's merchant risk.

The settlement includes $1.7 million of penalties, in anticipation, for which the company has been accruing reserves since the third quarter of 2004. The payment of the penalties is expected in the first half of 2005 from reserved amounts.

Debt service coverage ratios for 2004 were in line with projections at 2.1x versus a projected 2.3x. AES Eastern Energy expects coverage ratios to be over 2.4x for the 2005.

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