Fitch lowers AES El Salvador view to negative

Fitch Ratings said it affirmed AES El Salvador Trust II's foreign- and local-currency issuer default ratings at BB.

The action applies to the company's $310 million bond issuance due March 28, 2023.

The outlook also was revised to negative from stable.

The negative outlook is based on the recent downgrade of El Salvador's sovereign rating to BB- from BB with a negative outlook, Fitch said.

A significant portion of AES El Salvador's cash flow generation comes from the government in the form of subsidies, which exposes the company to El Salvador's creditworthiness and payment ability, the agency said.

The negative outlook also considers the company's exposure to the sustained weakening macroeconomic conditions in El Salvador, which could affect electricity demand, collections and non-technical electric losses, Fitch said.

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