Fitch affirms AES El Salvador

Fitch Ratings said it affirmed the BBB- rating assigned to AES El Salvador Trust's $300 million issuance of political risk-protected notes due 2016 following the final settlement of the notes.

Fitch said the rating reflects the combined credit quality of the trust's four operating companies: Compania de Alumbrado Electrico de San Salvador SA de CV (CAESS), AES CLESA y Compania S en C de CV, Empresa Electrica de Oriente SA de CV (EEO) and Distribuidora Electrica de Usulutan SA de CV (DEUSEM).

A portion of the proceeds of the trust's issuance have been used to repay existing debt at CAESS, CLESA and EEO. Remaining proceeds are expected to be used to pay dividends to the shareholders of CAESS and CLESA and for general corporate purposes.

The new notes are rated above the BB+ foreign currency rating of the company and country because they benefit from external liquidity facilities totaling 12 months of interest payments, the agency said. A six-month debt service reserve account coupled with a six-month letter of credit from Credit Suisse help protect against a potential currency inconvertibility/non-transfer event and allow for the rating of the notes to breach the sovereign ceiling.

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