Fitch affirms AES Tiete

Fitch Ratings said it affirmed the B international rating on AES IHB Cayman, Ltd.'s $300 million 11.5% trust certificates and the BB+(bra) national scale rating of AES Tiete SA. Both ratings have a stable outlook.

Fitch said the ratings reflect the continuing improvement of the credit-protection measures of the underlying operating company, Brazil-based AES Tiete, and the upgrade in December of Eletropaulo Metropolitana Eletricidade de Sao Paulo SA, AES Tiete's sole contractual offtaker beginning in 2006, to B+ from B. The certificates are guaranteed by AES Tiete Empreendimentos SA, the controlling shareholder, AES Tiete Participacoes SA and AES Tiete Holdings LTD., holding companies of AES Tiete, and the shares owned by these companies are pledged as collateral.

AES Tiete's financial condition is strong, Fitch said, and supported by a low and relatively stable operating cost structure and operating company debt that is easily manageable. Operating company leverage is low with a total debt to EBITDA ratio of 0.7x.

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