Fitch rates AES El Salvador bonds BBB-

Fitch Ratings said it assigned a BBB- rating to AES El Salvador Trust's proposed $290 million political-risk-protected 10-year bond issuance. Fitch has also assigned a BBB- local currency debt rating and BB+ foreign currency rating to AES El Salvador SA de CV.

The outlook is stable.

The proceeds of the issuance by the trust will be used to repay existing debt at Compania de Alumbrado Electrico de San Salvador SA de CV, AES CLESA y Compania S en C de CV and Empresa Electrica de Oriente, SA de CV. After repayment of the existing debt, remaining proceeds are expected to be used to pay dividends to the shareholders of Compania de Alumbrado Electrico and AES CLESA, and for general corporate purposes.

Fitch said the ratings are based on the combined credit strength of the subsidiaries' operating assets and reflect the group's relatively large size compared to the market, low business risk profile, its geographical diversification, its operating efficiency and its adequate financial profile.

The rating also reflects the nonexclusive nature of the service territories and the electricity sector's exposure to potential social, political and regulatory changes. The ratings of AES El Salvador also incorporate the economic, political and other sovereign risks inherent in investments in El Salvador, the agency said.

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