FILED PURSUANT TO RULE 424(B)(2)
REGISTRATION NO. 333-37924
PROSPECTUS SUPPLEMENT
(To Prospectus Dated May 26, 2000)
(pound)85,000,000
The AES Corporation
8.375% Senior Notes Due 2011
The Senior Notes will bear interest at the rate of 8.375% per year.
Interest on the Senior Notes is payable on March 1 and September 1 of each year,
beginning on September 1, 2001. The Senior Notes will mature on March 1, 2011.
The AES Corporation may redeem some or all of the Senior Notes at any time. The
redemption prices are discussed under the caption "Description of
Notes--Optional Redemption."
The Senior Notes will be unsecured senior obligations of The AES
Corporation and will rank equally with all of The AES Corporation's other
unsecured senior indebtedness.
We have applied to list the Senior Notes on the Luxembourg Stock
Exchange in accordance with the rules thereof.
Investing in the Senior Notes involves certain risks. See "Risk Factors"
beginning on Page 3.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus supplement or the related prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Per Senior Note Total
Public Offering Price......................... 100.000% (pound)85,000,000
Underwriting Discount......................... 1.50% (pound)1,275,000
Proceeds to AES (before expenses)............. 98.50% (pound)83,725,000
Interest on the Senior Notes will accrue from the date of issuance.
The underwriters are offering the Senior Notes subject to various
conditions. The underwriters expect to deliver the Senior Notes in book-entry
form only through Clearstream Banking, societe anonyme, or the Euroclear System,
as the case may be, on or about February 22, 2001.
Sole Book Running Manager Joint Lead Manager
Schroder Salomon Smith Barney JPMorgan
ABN AMRO Incorporated Dresdner Kleinwort Wasserstein
February 15, 2001
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus supplement
or the accompanying prospectus. You must not rely on any unauthorized
information or representations. This prospectus supplement is an offer to sell
only the securities offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus supplement and the accompanying prospectus is current only as of the
dates thereof.
TABLE OF CONTENTS
Page
Prospectus Supplement
Special Note on Forward-Looking Statements............................. S-4
Offering Summary....................................................... S-5
The Company............................................................ S-7
Use of Proceeds........................................................ S-7
Description of Notes................................................... S-8
Certain U.S. Federal Income Tax Considerations......................... S-17
General Listing Information............................................ S-20
Underwriting........................................................... S-21
Legal Matters.......................................................... S-22
Experts................................................................ S-22
Prospectus
About This Prospectus.................................................. 2
Risk Factors........................................................... 3
Where You Can Find More Information.................................... 10
Incorporation of Documents by Reference................................ 10
Special Note on Forward-Looking Statements............................. 11
Use of Proceeds........................................................ 11
Ratio of Earnings to Fixed Charges..................................... 12
The Company............................................................ 12
Description of Capital Stock........................................... 12
Description of Debt Securities......................................... 18
Description of Stock Purchase Contracts and Stock Purchase Units....... 28
Description of Securities Warrants..................................... 29
Plan of Distribution................................................... 30
Legal Matters.......................................................... 31
Experts................................................................ 31
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In connection with the issue of the Senior Notes, Salomon Brothers
International Limited may over-allot or effect transactions which stabilize or
maintain the market price of the Senior Notes at a level which might not
otherwise prevail. Such stabilizing, if commenced, may be discontinued at any
time and shall be conducted in accordance with all applicable laws and rules.
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Schroder is a trademark of Schroders Holdings plc and is used under
license by Salomon Brothers International Limited.
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We have not authorized the Senior Notes to be offered to the public in
the United Kingdom, within the meaning of the Public Offers of Securities
Regulations 1995, as amended, and none of this prospectus supplement, the
accompanying prospectus or any other document issued in connection with this
offering, may be passed on to any person in the United Kingdom, unless that
person is of a kind described in Article 11(3) of the Financial Services Act of
1986 (Investment Advertisements) (Exemptions) Order 1996, as amended, or is a
person to whom the document may otherwise be issued or passed on. All applicable
provisions of the Financial Services Act 1986, as amended, must be complied with
in respect of anything done in relation to the Senior Notes in, from, or
otherwise involving the United Kingdom.
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The Luxembourg Stock Exchange takes no responsibility for the contents
of this prospectus supplement and the accompanying prospectus, makes no
representations as to their accuracy or completeness and expressly disclaims any
liability whatsoever for any loss arising from or in reliance upon the whole or
any part of the contents of this prospectus supplement and the accompanying
prospectus.
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Unless otherwise specified or the context otherwise requires,
references in this prospectus supplement to "(pound)" and "pounds sterling" are
to lawful money of the United Kingdom and "$" and "U.S. dollars" are to lawful
money of the United States of America. Except as otherwise stated herein,
conversions of non-U.S. dollar currencies for the Senior Notes to U.S. dollars
have been calculated using the noon buying rate in New York, New York on
February 15, 2001 for cable transfers in pounds sterling as certified for
customs purposes by the Federal Reserve Bank of New York was (pound)1.00 =
$1.45. These translations should not be construed as representations that the
non-U.S. dollar currency amount actually represents such U.S. dollar amount or
could be converted into U.S. dollar at such rate or at any other rates.
Having made all reasonable inquiries, we confirm that this prospectus
supplement and the accompanying prospectus contain all information with respect
to our company and the Senior Notes which is material in the context of the
issue and offering of the Senior Notes, that the information contained herein is
true and accurate in all material respects and is not misleading, that the
opinions and intentions expressed herein are honestly held and have been reached
after considering all relevant circumstances and are based on reasonable
assumptions, that there are not other facts the omission of which would, in the
context of the issue and offering of the Senior Notes, make this prospectus
supplement and the accompanying prospectus as a whole or any of such information
or the expression of any such opinions or intentions misleading in any material
respect, that all reasonable inquiries have been made by us to verify the
accuracy of such information and that this prospectus supplement and the
accompanying prospectus do not contain an untrue statement of material fact or
omit to state a material fact required to be stated herein or therein or
necessary in order to make the statements herein or therein, in the light of the
circumstances under which they were made, not misleading. We accept
responsibility accordingly.
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This prospectus supplement and the accompanying prospectus refer to
documents incorporated by reference. For this prospectus supplement and the
accompanying prospectus used for purposes of listing with the Luxembourg Stock
Exchange, incorporation by reference will not be applicable and those documents
otherwise incorporated by reference as of the date hereof will be attached to
this prospectus supplement and the accompanying prospectus.
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus include
forward-looking statements. We have based these forward-looking statements on
our current expectations and projections about future events. These
forward-looking statements are subject to risks, uncertainties, and assumptions
related to AES, including, those set forth under the caption "Risk Factors" in
the accompanying prospectus and those set forth under the caption "Cautionary
Statements and Risk Factors" in our annual report on Form 10-K which is
incorporated by reference herein.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. In light of these risks, uncertainties and assumptions, the
forward-looking events discussed in this prospectus supplement and the
accompanying prospectus might not occur.
OFFERING SUMMARY
The following information is qualified entirely by, and should be read
in conjunction with, the more detailed information appearing elsewhere in and
incorporated by reference into this prospectus supplement and the accompanying
prospectus.
Senior Notes Offered...............We are offering(pound)85,000,000 aggregate
principal amount of our 8.375% Senior Notes
due March 1, 2011. Interest on the Senior
Notes will be payable semiannually on March 1
and September 1, commencing on September 1,
2001.
Record Date........................The regular record date for each interest
payment date will be the close of business on
the 15th day of the month preceding such
interest payment date.
Ranking............................The Senior Notes will be our direct,
unsecured and unsubordinated obligations,
ranking equal in right of payment with all of
our other unsecured and unsubordinated
obligations. The indenture and the
supplemental indenture under which the Senior
Notes will be issued contain no restrictions
on the amount of additional indebtedness we
may incur.
Optional Redemption................We may redeem some or all of the Senior Notes
at any time at par plus a Make-Whole Amount
(as defined). See "Description of
Notes--Optional Redemption."
Covenants..........................We have agreed to certain restrictions on
incurring secured debt and entering into sale
and leaseback transactions. See "Description
of Notes--Certain Covenants of AES."
Listing............................We have applied to list the Senior Notes on
the Luxembourg Stock Exchange.
Form of Senior Notes...............The Senior Notes will be in fully registered
form. One or more global notes registered in
the name of a common depositary for
Clearstream Banking, societe anonyme
("Clearstream"), and Euroclear Bank S.A./N.V,
as operator of the Euroclear System
("Euroclear"), will be delivered to the
common depositary. Investors may elect to
hold book-entry interests in the global note
through organizations that participate,
directly or indirectly, in Clearstream or
Euroclear.
Except in limited circumstances, investors
will not be entitled to have Senior Notes
registered in their names and will not
receive or be entitled to receive Senior
Notes in definitive form. Senior Notes will
be sold in minimum denominations of
(pound)1,000 and integral multiples of
(pound)1,000.
Settlement and Payment.............Initial purchasers are required to make
payment in pounds sterling. Initial
settlement for the Senior Notes will be made
in immediately available funds. Principal of
and interest on the Senior Notes are payable
in pounds sterling.
Use of Proceeds....................We intend to use the net proceeds of this
offering of Senior Notes (1) to fund all or a
portion of the purchase price of Thermo
Ecotek Corporation and (2) for general
corporate purposes. See "Use of Proceeds" and
"Underwriting."
THE COMPANY
We are a global power company committed to serving the world's need for
electricity and other services in a socially responsible way.
We have been successful in growing our business and serving additional
customers by, in part, participating in competitive bidding under privatization
initiatives. We have been particularly interested in acquiring existing
businesses or assets in electricity markets that are promoting competition and
eliminating rate of return regulation. We believe that our experience in
competitive markets and our worldwide integrated group structure, with our
significant geographic coverage and presence, enable us to react quickly and
creatively in these situations.
Our ownership portfolio of power facilities includes new plants
constructed for such purposes as well as existing power plants acquired through
competitively bid privatization initiatives and negotiated acquisitions. In the
electricity generation business, we now own and operate (entirely or in part) a
diverse portfolio of electric power plants (including those within integrated
distribution companies).
We also sell electricity directly to end users such as commercial,
industrial, governmental and residential customers through our "distribution"
business. We have ownership interests in distribution companies in Argentina,
India, the United States, Brazil, Venezuela, El Salvador, Dominican Republic,
and The Republic of Georgia. We also have assumed management control of a heat
and electricity distribution business in Kazakhstan. We also have subsidiaries
in the United States and Kazakhstan that serve retail customers in those states
that have introduced a competitive market for the sale of electricity to end
users.
USE OF PROCEEDS
The net proceeds (before expenses) from this offering are
(pound)83,725,000. We intend to use the net proceeds from this offering (1) to
fund all or a portion of the purchase price of Thermo Ecotek Corporation and (2)
for general corporate purposes.
DESCRIPTION OF NOTES
The Senior Notes will be issued under an indenture dated as of December 8, 1998
and a supplemental indenture, dated as of February 22, 2001, each between the
Company and Bank One, National Association (formerly known as The First National
Bank of Chicago), as trustee (the "Trustee") (collectively, the "Indenture").
The following summaries of certain provisions of the Indenture do not purport to
be complete and are subject to, and are qualified in their entirety by reference
to, all of the provisions of the Indenture, including the definition in the
Indenture of certain terms. Wherever particular sections or defined terms of the
Indenture are referred to, such sections or defined terms are incorporated in
this prospectus supplement by reference. A copy of the Indenture is available
for inspection at the office of the Trustee.
As used herein, the term "AES" means The AES Corporation, and does not
include any of its subsidiaries.
The Indenture does not limit the aggregate principal amount of
indebtedness which may be issued thereunder and provides that senior debt
securities may be issued thereunder from time to time in one or more series. The
Senior Notes constitute a separate series under the Indenture.
General
The Senior Notes will be issued as a series of Senior Notes under the
Indenture. The Senior Notes will not be limited in aggregate principal amount.
Additional Senior Notes may be issued under the Indenture from time to time as
part of this series of Senior Notes.
The entire principal amount of the Senior Notes will mature and become
due and payable, together with any accrued and unpaid interest thereon, on March
1, 2011. The Senior Notes are not subject to any sinking fund provision.
Senior Notes will only be sold in a minimum aggregate principal amount
of (pound)1,000 and integral multiples thereof.
Interest
Each Senior Note shall bear interest at 8.375% per annum from the date
of original issuance, payable semi annually on March 1 and September 1 of each
year to the person in whose name such Senior Note is registered at the close of
business on the fifteenth calendar day of the month preceding such payment date.
The initial interest payment date is September 1, 2001. The amount of interest
payable will be computed on the basis of a 360-day year of twelve 30-day months.
In the event that any date on which interest is payable on the Senior Notes is
not a business day, then payment of the interest payable on such date will be
made on the next succeeding day which is a business day (and without any
interest or other payment in respect of any such delay), except that, if such
business day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding business day, in each case with the same force and
effect as if made on such date.
Listing of Senior Notes on the Luxembourg Stock Exchange
We have applied to list the Senior Notes on the Luxembourg Stock
Exchange in accordance with the rules of the Luxembourg Stock Exchange. In
connection with the Luxembourg Stock Exchange listing application, the legal
notice relating to the issuance of the Senior Notes and AES's constitutional
documents will be deposited with the Registrar of the District Court in
Luxembourg (Greffier en Chef du Tribunal d'Arrondissement de et a Luxembourg)
where such documents may be examined and copies thereof may be obtained upon
request. Additionally, copies of the above documents together with this
prospectus supplement, the accompanying prospectus, the Indenture and AES's
current annual and quarterly reports, as well as all its future annual reports
and quarterly reports, so long as any of the Senior Notes are outstanding, will
be made available for inspection at the main office of Banque Internationale a
Luxembourg S.A. in Luxembourg. Banque Internationale a Luxembourg S.A. will act
as intermediary between the Luxembourg Stock Exchange, AES and the holders of
the Senior Notes. In addition, copies of the annual reports and quarterly
reports of AES may be obtained free of charge at such office.
As long as any Senior Notes are listed on the Luxembourg Stock Exchange
and so long as the rules of such exchange
so require, an agent for making payments on, and transfers of, Senior Notes will
be maintained in Luxembourg. AES has initially designated Banque Internationale
a Luxembourg S.A. for such purposes.
Optional Redemption
The Senior Notes are subject to redemption upon not less than 30 nor
more than 60 days' notice by mail, at any time, as a whole or in part, at the
election of AES, at a price equal to the sum of (i) 100% of the principal amount
thereof plus accrued interest to the redemption date plus (ii) the Make-Whole
Amount, if any.
The term "Make-Whole Amount" shall mean, in connection with any
optional redemption of any Senior Note, the excess, if any, of (i) the aggregate
present value as of the date of such redemption of the principal being redeemed
and the amount of interest (exclusive of interest accrued to the redemption
date) that would have been payable in respect of such prepayment had not been
made, determined by discounting, on a semiannual basis, such principal and
interest at the Reinvestment Rate (determined on the business day preceding the
date of such redemption) from the respective dates on which such principal and
interest would have been payable if such payment had not been made, over (ii)
the aggregate principal amount of the Senior Notes being redeemed.
The term "Reinvestment Rate" shall mean 0.50% (one-half of one percent)
plus the Gilt Rate.
"Gilt Rate" is defined to mean the yield to maturity at the time of
computation of United Kingdom government securities with a constant maturity as
compiled by the Office for National Statistics and published in the most recent
financial statistics that have become publicly available at least two business
days in London prior to the date fixed for redemption, most nearly equal to then
remaining years to the stated maturity of the principal being redeemed (the
"Stated Maturity"); provided that if the number of years to the Stated Maturity
is not equal to the constant maturity of a United Kingdom government security
for which a weekly average yield is given, the Gilt Rate shall be obtained by
linear interpolation, calculated to the nearest one-twelfth of a year, from the
weekly average yields of United Kingdom government securities for which such
yields are given except that if the number of years to the Stated Maturity is
less than one year, the weekly average yield on actually traded United Kingdom
government securities adjusted to a constant maturity of one year shall be used.
Certain Covenants of AES
Restrictions on Secured Debt. If AES shall incur, issue, assume or guarantee
any indebtedness for borrowed money represented by notes, bonds, debentures or
other similar evidences of indebtedness, secured by a mortgage, pledge or other
lien on any Principal Property (as defined below) or any capital stock or
indebtedness held directly by AES of any Subsidiary of AES (as defined below),
AES shall secure the Senior Notes equally and ratably with (or prior to) such
indebtedness, so long as such indebtedness shall be so secured, unless after
giving effect thereto the aggregate amount of all such indebtedness so secured,
together with all Attributable Debt (as defined below) in respect of sale and
leaseback transactions involving Principal Properties, would not exceed 15% of
the Consolidated Net Assets (as defined below) of AES. This restriction will not
apply to, and there shall be excluded in computing secured indebtedness for the
purpose of such restriction, indebtedness secured by (a) property of any
Subsidiary of AES, (b) liens on property of, or on any shares of stock or debt
of, any corporation existing at the time such corporation becomes a Subsidiary,
(c) liens in favor of AES or any Subsidiary, (d) liens in favor of U.S. or
foreign governmental bodies to secure partial, progress, advance or other
payments, (e) liens on property, shares of stock or debt existing at the time of
acquisition thereof (including acquisition through merger or consolidation),
purchase money mortgages and construction cost mortgages existing at or incurred
within 180 days of the time of acquisition thereof, (f) liens existing on the
first date on which any Senior Notes issued under the Indenture are
authenticated by the Trustee, (g) liens under one or more credit facilities for
indebtedness in an aggregate principal amount not to exceed $900 million at any
time outstanding, (h) liens incurred in connection with pollution control,
industrial revenue or similar financings, and (i) any extension, renewal or
replacement of any debt secured by any liens referred to in the foregoing
clauses (a) through (h), inclusive. As of the date of this prospectus
supplement, AES does not own or lease any Principal Property.
The term "Principal Property" means any building, structure or other
facility (together with the land on which it is erected and fixtures comprising
a part thereof) used primarily for manufacturing, processing, research,
warehousing or distribution owned or leased by AES and having a net book value
in excess of 2% of Consolidated Net Assets, other than any
such building, structure or other facility or portion thereof which is a
pollution control facility financed by state or local governmental obligations
or which the principal executive officer, president and principal financial
officer of AES determine in good faith is not of material importance to the
total business conducted or assets owned by AES and its Subsidiaries as an
entirety.
The term "Consolidated Net Assets" means the aggregate amount of assets
(less reserves and other deductible items) after deducting current liabilities,
as shown on the consolidated balance sheet of AES and its Subsidiaries contained
in the latest annual report to the stockholders of AES and prepared in
accordance with generally accepted accounting principles.
The term "Attributable Debt" means the present value (discounted at the
rate of 8.375% per annum compounded monthly) of the obligations for rental
payments required to be paid during the remaining term of any lease of more than
12 months.
"Subsidiary" means, with respect to any person, any corporation,
association or other business entity of which a majority of the capital stock or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by such person.
Restrictions on Sales and Leasebacks. AES may not enter into any sale
and leaseback transaction involving any Principal Property, the acquisition or
completion of construction and commencement of full operation of which has
occurred more than 180 days prior thereto, unless (a) AES could incur a lien on
such property under the restrictions described above under "Restrictions on
Secured Debt" in an amount equal to the Attributable Debt with respect to the
sale and leaseback transaction without equally and ratably securing the Senior
Notes or (b) AES, within 180 days after the sale or transfer by AES, applies to
the retirement of its funded debt (defined as indebtedness for borrowed money
having a maturity of, or by its terms extendible or renewable for, a period of
more than 12 months after the date of determination of the amount thereof) an
amount equal to the greater of (i) the net proceeds of the sale of the Principal
Property sold and leased pursuant to such arrangement or (ii) the fair market
value of the Principal Property so sold and leased (subject to credits for
certain voluntary retirements of funded debt) as determined by the Board of
Directors of AES.
Events of Default
In addition to the Events of Default set forth in the accompanying
prospectus, an Event of Default will occur with respect to the Senior Notes if
an event of default, as defined in any indenture or instrument evidencing or
under which AES has at the date of the Indenture or shall thereafter have
outstanding any indebtedness, shall happen and be continuing and either (a) such
default results from the failure to pay the principal of such indebtedness in
excess of $50 million at final maturity of such indebtedness or (b) as a result
of such default the maturity of such indebtedness shall have been accelerated so
that the same shall be or become due and payable prior to the date on which the
same would otherwise have become due and payable, and such acceleration shall
not be rescinded or annulled within 60 days and the principal amount of such
indebtedness, together with the principal amount of any other indebtedness of
AES in default, or the maturity of which has been accelerated, aggregates $50
million or more; provided that the Trustee shall not be charged with knowledge
of any such default unless written notice thereof shall have been given to the
Trustee by AES, by the holder or an agent of the holder of any such
indebtedness, by the trustee then acting under any indenture or other instrument
under which such default shall have occurred, or by the holders of not less than
25% in the aggregate principal amount of the Senior Notes at the time
outstanding; and provided further that if such default shall be remedied or
cured by AES or waived by the holder of such indebtedness, then the Event of
Default under the Indenture by reason thereof shall be deemed likewise to have
been remedied, cured or waived without further action on the part of the
Trustee, any holder of Senior Notes or any other person.
Description of Book-Entry System
General. We will issue the Senior Notes as one or more global
securities (each, a "Global Senior Note") registered in the name of Bank One,
N.A., London Branch, as common depositary (the "Common Depositary") for
Clearstream Banking, societe anonyme ("Clearstream") and Euroclear Bank
S.A./N.V. (the "Euroclear Operator"), as operator of the Euroclear System
("Euroclear"). Investors may hold book-entry interests in the Global Senior
Notes ("Book-Entry Interests") through organizations that participate, directly
or indirectly, in Clearstream and/or Euroclear. Book-entry interests in the
Senior Notes
and all transfers relating to the Senior Notes will be reflected only in the
book-entry records of Euroclear and Clearstream and, with respect to interests
of indirect participants, their respective participants. The laws of some
countries and some states in the United States may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such laws may impair the ability to own, transfer or pledge the Book-Entry
Interests. All interests in the Senior Notes will be subject to the procedures
and requirements of Euroclear or Clearstream, as the case may be.
So long as Euroclear or Clearstream or their nominee, or the Common
Depositary, as the case may be, is the registered holder of the Global Senior
Notes, such party will be considered the sole holder of such Global Senior Notes
for all purposes under the Indenture. Except as set forth below under
"--Certificated Notes," participants or indirect participants are not entitled
to have Senior Notes or Book-Entry Interests registered in their names, will not
receive or be entitled to receive physical delivery of Senior Notes or
Book-Entry Interests in definitive form and will not be considered the owners or
holders thereof under the Indenture. Accordingly, each person owning a
Book-Entry Interest must rely on the procedures of Euroclear or Clearstream, as
the case may be, and, if such person is not a participant in Euroclear or
Clearstream, as the case may be, on the procedures of the participant in
Euroclear or Clearstream, as the case may be, through which such person owns its
interest, to exercise any rights and remedies of a holder under the Indenture.
See "--Action by Owners of Book-Entry Interests" below. If any definitive Senior
Notes are issued to participants or indirect participants, they will be issued
in registered form ("definitive registered notes"), as described under
"--Certificated Notes." Unless and until Book-Entry Interests are exchanged for
definitive registered notes (as described under "--Certificated Notes") the
certificated depositary interests held by the Common Depositary may not be
transferred except as a whole by Euroclear or Clearstream to the Common
Depositary or by the Common Depositary to Euroclear or Clearstream,
respectively, or another nominee at Euroclear and Clearstream or by Euroclear
and Clearstream or any such nominee to a successor of Euroclear or Clearstream
or a nominee of such successor.
Payments on the Global Notes. Payments of any amounts owing in respect
of the Global Senior Notes will be made through one or more paying agents (the
"Paying Agents") appointed under the Indenture (which initially will include the
Trustee). Payment to or to the order of the holder of the Global Senior Notes
shall discharge payment obligations in respect of the Senior Notes represented
thereby. Upon receipt of any such amounts, Euroclear or Clearstream, as the case
may be, should distribute such payments to its respective participants. Payments
of all such amounts will be made without deduction or withholding for or on
account of any present or future taxes, duties, assessments or governmental
charges of whatever nature except as may be required by law. If withholding for
taxes is required by law, such withholding will occur in accordance with
applicable law.
Under the provisions of the Indenture, the registered holder of the
Global Senior Notes is treated as the owner of the Senior Notes represented
thereby, and the issuer has no responsibility or liability for the payment of
amounts owing in respect of the depositary interests held by the Common
Depositary for Euroclear and Clearstream to owners of Book-Entry Interests.
Payments by Euroclear or Clearstream participants to owners of Book-Entry
Interests held through such participants are the responsibility of such
participants as is the case with securities held for the account of customers in
bearer form or registered in "street name".
None of AES, the Trustee or any agent of AES or the Trustee have any
responsibility or liability for any aspect of the records relating to or
payments made on account of Book-Entry Interests or for maintaining, supervising
or reviewing any records relating to such Book-Entry Interests.
Information Concerning Euroclear and Clearstream. Clearstream advises
that it is incorporated under the laws of Luxembourg as a professional
depositary. Clearstream holds securities for its participating organizations
("Clearstream Participants") and facilitates the clearance and settlement of
securities transactions between Clearstream Participants through electronic
book-entry changes in accounts of Clearstream Participants, thereby eliminating
the need for physical movement of certificates. Clearstream provides to
Clearstream Participants, among other things, services for safekeeping,
administration, clearance and settlement of internationally traded securities
and securities lending and borrowing. Clearstream interfaces with domestic
markets in several countries. As a professional depositary, Clearstream is
subject to regulation by the Luxembourg Monetary Institute. Clearstream
Participants are recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations and may include the underwriters.
Indirect access to Clearstream is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Clearstream Participant either directly or indirectly.
Distributions with respect to the Senior Notes held beneficially
through Clearstream will be credited to cash accounts of Clearstream
Participants in accordance with its rules and procedures.
Euroclear advises that it was created in 1968 to hold securities for
participants of Euroclear ("Euroclear Participants") and to clear and settle
transactions between Euroclear Participants through simultaneous electronic
book-entry delivery against payment, thereby eliminating the need for physical
movement of certificates and any risk from lack of simultaneous transfers of
securities and cash. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic markets in several
countries. Euroclear is operated by Euroclear Bank S.A./ N.V (the "Euroclear
Operator"), under contract with Euroclear Clearance Systems S.C., a Belgian
Cooperative corporation (the "Cooperative"). All operations are conducted by the
Euroclear Operator, and all Euroclear securities clearance accounts and
Euroclear cash accounts are accounts with the Euroclear Operator, not the
Cooperative. The Cooperative establishes policy for Euroclear on behalf of
Euroclear Participants. Euroclear Participants include banks (including central
banks), securities brokers and dealers and other professional financial
intermediaries and may include the underwriters. Indirect access to Euroclear is
also available to other firms that clear through or maintain a custodial
relationship with a Euroclear Participant, either directly or indirectly.
The Euroclear Operator was launched on December 31, 2000, and replaced
Morgan Guaranty Trust Company of New York as the operator of and banker to the
Euroclear System. Euroclear Bank S.A./N.V. has capital of approximately EUR 1
billion.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear and
the related Operating Procedures of the Euroclear System, and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear, and receipts of payments with respect to securities in
Euroclear. All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities clearance accounts.
The Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
Distributions with respect to the Senior Notes held beneficially
through Euroclear will be credited to the cash accounts of Euroclear
Participants in accordance with the Terms and Conditions.
Action by Owners of Book-Entry Interests. As soon as practicable after
receipt by the Trustee of notice of any solicitation of consents or request for
a waiver or other action by the holders of Senior Notes, the Trustee will send
to Euroclear and Clearstream a notice containing (a) such information as is
contained in such notice received by the Trustee, (b) a statement that at the
close of business on a specified record date Euroclear and Clearstream will be
entitled to instruct the Trustee as to the consent, waiver or other action, if
any, pertaining to such Senior Notes and (c) a statement as to the manner in
which such instructions may be given. In addition, the Trustee will forward to
Euroclear and Clearstream, or, based upon instructions received from Euroclear
and Clearstream, to owners of Book-Entry Interests, all materials pertaining to
any such solicitation, request, offer or other action. Upon the written request
of Euroclear and Clearstream, as applicable, the Trustee shall endeavor insofar
as practicable to take such action regarding the requested consent, waiver,
offer, or other action in respect of such Senior Notes in accordance with any
instructions set forth in such request. Euroclear and Clearstream may grant
proxies or otherwise authorize their respective participants, or persons owning
Book-Entry Interests through their respective participants, to provide such
instructions to the Trustee so that it may exercise any rights of a holder or
take any other actions which a holder is entitled to take under the Indenture.
The Trustee will not exercise any discretion in the granting of consents or
waivers or the taking of any other action relating to the Indenture.
Reports. The Trustee will immediately send to Euroclear and Clearstream
a copy of any notices, reports and other communications received relating to
AES, the Senior Notes or the Book-Entry Interests.
Settlement. Any secondary market trading activity in the Book-Entry
Interests is expected to occur through the Euroclear Participants and
Clearstream Participants and the securities custody accounts of investors will
be credited with their holdings against payment in same-day funds on the
settlement date.
Certificated Notes
Each owner of a beneficial interest in the Global Senior Note will
receive a definitive registered note (i) if Euroclear and Clearstream notify us
that they are unwilling or unable to act as clearing agency and a successor is
not appointed by us within 90 days or (ii) if we, in our sole discretion, at any
time determine not to have the Senior Notes represented by a Global Senior Note.
In the event definitive notes are issued, we will promptly provide notice to the
holders of the Senior Notes.
Any definitive registered note will be issued in registered form in
denominations of (pound)1,000 principal amount or multiple thereof. Any
definitive registered note will be registered in such name or names as the
Common Depositary shall be instructed based on the instructions of Euroclear or
Clearstream. It is expected that such instructions will be based upon directions
received by Euroclear or Clearstream from their participants with respect to
ownership of Book-Entry Interests. To the extent permitted by law, AES, the
Common Depositary and any paying agent shall be entitled to treat the person in
whose name any definitive registered note is registered as the absolute owner
thereof. The amount of the relevant Global Senior Notes, and the Book-Entry
Interests, will be increased or decreased to reflect exchanges or issues of
definitive registered notes. The Common Depositary will make the appropriate
adjustments to the Global Senior Note or Notes underlying the Book-Entry
Interests to reflect any such issues or adjustments. The Indenture contains
provisions relating to the maintenance by a registrar of a register reflecting
ownership of definitive registered notes, if any, and other provisions customary
for a registered debt security. Payment of principal and interest on, and all
other amounts payable under, each definitive registered note will be made to the
holder appearing on the register at the close of business on the record date at
his address shown on the register on the record date.
In the event individual certificates for the Senior Notes are issued,
the holders of such Senior Notes will be able to receive payment on the Senior
Notes and effect transfers of the Senior Notes at the offices of the Luxembourg
paying agent and transfer agent. We have appointed Banque Internationale a
Luxembourg S.A. as paying agent and transfer agent in Luxembourg with respect to
the Senior Notes in individual certificated form, and as long as the Senior
Notes are listed on the Luxembourg Stock Exchange, we will maintain a paying
agent in Luxembourg. In the event individual certificates for the Senior Notes
are issued in definitive form, principal of, premium, if any, and interest on
the Senior Notes will be payable, and the Senior Notes will be exchangeable and
transferable, as described below, and so long as the Senior Notes are listed on
the Luxembourg Stock Exchange, at the offices of the paying agent in Luxembourg.
We have also appointed Bank One, N.A., London Branch, as principal
paying agent.
Unless and until we issue the Senior Notes in fully certificated,
registered form, (1) you will not be entitled to receive a certificate
representing your interest in the Senior Notes; (2) all references in this
prospectus supplement or in the accompanying prospectus to actions by holders
will refer to actions taken by the Common Depositary upon instructions from
Euroclear and Clearstream; and (3) all references in this prospectus supplement
or in the accompanying prospectus to payments and notices to holders will refer
to payments and notices to the Common Depositary, as the registered holder of
the Senior Notes, for distribution to you in accordance with its policies and
procedures.
The cost of preparing, printing, packaging and delivering a definitive
registered note will be solely the responsibility of AES.
Principal of and interest on, and all other amounts payable under, any
definitive registered notes will be payable at the office of the paying agent in
Luxembourg maintained for such purposes. The relevant definitive registered note
must be surrendered at the office of the paying agent in Luxembourg to receive
payments of principal. In addition, interest on definitive registered notes may
be paid by check mailed to the person entitled thereto as shown on the register
on the record date for the definitive registered notes. If a payment date is not
a business day at a place of payment, payment may be made at that place on the
next succeeding business day and no interest shall accrue for the intervening
period.
Transfers of any definitive registered note may be made, by presenting
and surrendering such note at the office of any transfer agent. Transfers of a
portion of a definitive registered note may be made in authorized denominations
of (pound)1,000 at the office of any transfer agent and new definitive
registered notes in appropriate denominations will be made available by the
issuer at such office. No service charge will be made for any registration of
transfer or exchange of any definitive registered notes but the trustee may
require payment of a sum sufficient to cover any tax or other governmental
change payable in connection therewith.
All Senior Notes will be recorded in a register maintained by the
Common Depositary, and will be registered in the
name of Clearstream or Euroclear for the benefit of owners of beneficial
interests in the Global Senior Notes.
Payments of Principal and Interest; Transfer or Exchange
The Indenture will require that payments in respect of the Senior Notes
(including principal, premium, if any, and interest) held of record by the
Common Depositary, Clearstream or Euroclear, as the case may be, be made in same
day funds. Payments in respect of the Senior Notes held of record by holders
other than the Common Depositary, Clearstream or Euroclear, as the case may be,
may at the option of AES, be made by check and mailed to such holders of record
as shown on the register for the Senior Notes.
All transfers of Book-Entry Interests are recorded in accordance with
the book-entry system maintained by Euroclear or Clearstream, as applicable,
pursuant to customary procedures established by each respective system and its
participants. While a Global Senior Note is outstanding, holders of definitive
registered notes may exchange their definitive registered notes for Book-Entry
Interests in the applicable Global Senior Notes by surrendering their definitive
registered notes to the Trustee or to the paying and transfer agent in
Luxembourg. The amount of the Book-Entry Interests will be increased or
decreased to reflect such transfers or exchanges. The Trustee or the paying and
transfer agent in Luxembourg, as applicable, will make the appropriate
adjustments to the applicable Global Senior Note or exchange such Global Senior
Note for a new Global Senior Note in an appropriate principal amount to reflect
any such transfers or exchanges.
Substitution of Currency
Principal of and interest on, and all other amounts payable under, any
definitive registered notes will be payable at the corporate trust office or
agency of the Trustee in The City of New York and at the office of the paying
and transfer agent in London and Luxembourg maintained for such purposes. The
relevant definitive registered note must be surrendered at the office of the
Trustee in New York City or at the office of the paying and transfer agent in
London and Luxembourg to receive payments of principal. Pursuant to the Treaty
establishing the European Community, as amended by the Treaty on European Union,
signed at Maastricht on February 7, 1992, the Euro was introduced on January 1,
1999 in substitution for the national currencies of eleven member states of the
European Union. Although the United Kingdom government exercised its opt-out and
is not participating in the introduction of the Euro, the United Kingdom
government has stated that the United Kingdom might wish to join the single
currency at a later date. If the United Kingdom adopts the Euro, the regulations
of the European Commission relating to the Euro shall apply to the Senior Notes.
In accordance with the Indenture and the laws of the State of New York, none of
the foregoing will entitle either us or any holder of Senior Notes to early
redemption, rescission, notice or repudiation of the terms and conditions of the
Senior Notes or the Indenture or to raise other defenses or to request any
compensation claim, nor will they affect any of our other obligations under the
Senior Notes and the Indenture.
Governing Law
The Indenture and Senior Notes will be governed by and construed in
accordance with the laws of the State of New York, without giving effect to such
state's conflict of laws principles.
Notices
Notices to holders of the Senior Notes will be published in authorized
newspapers in The City of New York, in London, and, so long as such Senior Notes
are listed on the Luxembourg Stock Exchange and the rules of that exchange so
require, in a leading newspaper having general circulation in Luxembourg. It is
expected that publication will be made in The City of New York in The Wall
Street Journal, in London in the Financial Times and in Luxembourg in the
Luxemburger Wort. Any such notice shall be deemed to have been given on the date
of such publication or, if published more than once, on the date of the first
such publication.
Information Concerning the Trustee
AES and its subsidiaries may maintain deposit accounts and conduct
other banking transactions with the Trustee in the ordinary course of business.
Other Provisions
See the accompanying prospectus for a description of certain additional
provisions of the Indenture, including events of default thereunder and
provisions for amendments and modifications thereof.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a general discussion of certain U.S. federal income
tax consequences of the ownership and disposition of Senior Notes to an initial
holder purchasing a Senior Note at its "issue price" in this offering and
holding the Senior Note as a capital asset within the meaning of Section 1221 of
the Code (as defined below). The "issue price" is the first price to the public
at which a substantial amount of the Senior Notes is sold for money (excluding
sales to bond houses, brokers or similar persons or organizations acting in the
capacity of underwriters, placement agents or wholesalers).
This discussion is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury Regulations, judicial interpretations and
administrative interpretations as of the date hereof, all of which are subject
to change, including changes with retroactive effect. This discussion does not
address all aspects of U.S. federal income taxation that may be relevant to
holders in light of their particular circumstances or to holders subject to
special rules, such as certain financial institutions, insurance companies,
dealers and certain traders in securities, persons holding Senior Notes in
connection with a hedging transaction, "straddle", conversion transaction or
other integrated transaction, or persons who have ceased to be United States
citizens or to be taxed as resident aliens. This discussion does not address the
tax consequences to partnerships or other pass-through entities or persons
investing through such partnerships or entities. This discussion does not
address any tax consequences arising under the laws of any state, local or
foreign jurisdiction. Prospective holders should consult their tax advisers with
respect to the particular tax consequences to them of owning and disposing of
Senior Notes, including the consequences under the laws of any state, local or
foreign jurisdiction.
"U.S. Holder" means an owner of a Senior Note that is, for U.S. federal
income tax purposes, (i) a citizen or resident alien individual of the United
States, (ii) a corporation or other entity taxed as a corporation for federal
income tax purposes created or organized in or under the laws of the United
States or of any political subdivision thereof or (iii) an estate or trust the
income of which is subject to U.S. federal income taxation regardless of its
source.
"Non-U.S. Holder" means an owner of a Senior Note that is, for U.S.
federal income tax purposes, a non-resident alien individual, a foreign
corporation or a non-resident alien fiduciary of a foreign estate or trust.
U.S. Holders
A U.S. Holder who uses the cash method of accounting will be required
to include in income the U.S. dollar value of the foreign currency interest
payment (determined on the date the payment is received) regardless of whether
the payment is in fact converted to U.S. dollars at that time, and this U.S.
dollar value will be the U.S. Holder's tax basis in the foreign currency.
In the case of an accrual method taxpayer, a U.S. Holder will be
required to include in income the U.S. dollar value of the amount of interest
income that has accrued and is otherwise required to be taken into account with
respect to a Senior Note during an accrual period. The U.S. dollar value of the
accrued income will be determined by translating the income at the average rate
of exchange for the accrual period or, with respect to an accrual period that
spans two taxable years, at the average rate for the partial period within the
taxable year. The U.S. Holder will recognize ordinary income or loss with
respect to accrued interest income on the date such income is actually received
(including a payment attributable to accrued but unpaid interest upon the sale,
exchange or retirement of a Senior Note). The amount of ordinary income or loss
recognized will equal the difference between the U.S. dollar value of the
foreign currency payment received (determined on the date the payment is
received) in respect of the accrual period and the U.S. dollar value of interest
income that has accrued during such accrual period (as determined above).
A U.S. Holder may elect to translate interest income into U.S. dollars
at the spot rate on the last day of the interest accrual period (or, in the case
of an accrual period that spans two taxable years, at the exchange rate in
effect on the last day of the partial period within the taxable year) or, if the
date of receipt is within five business days of the last day of the interest
accrual period or taxable year, the spot rate on the date of receipt. A U.S.
Holder that makes such an election must apply it consistently to all debt
instruments held by the U.S. Holder at the beginning of the first taxable year
to which the election applies or thereafter acquired by such U.S. Holder and
cannot change the election without the consent of the Internal Revenue Service.
A U.S. Holder's tax basis in a Senior Note will be the U.S. dollar
value of the foreign currency amount paid for such Senior Note determined on the
date of such purchase. A U.S. Holder who purchases a Senior Note with previously
owned foreign currency will recognize ordinary income or loss in an amount equal
to the difference, if any, between such U.S. Holder's tax basis in the foreign
currency and the U.S. dollar fair market value of the Senior Note on the date of
purchase.
Gain or loss realized upon the sale, exchange or retirement of a Senior
Note that is attributable to fluctuations in currency exchange rates will be
ordinary income or loss which will not be treated as interest income or expense.
With respect to a U.S. Holder who uses the cash method of accounting, gain or
loss attributable to fluctuations in exchange rates will equal the difference
between (i) the U.S. dollar value of the foreign currency principal amount of
the Senior Note determined on the date such payment is received or the note is
disposed of, and (ii) the U.S. dollar value of the foreign currency principal
amount of the Senior Note determined on the date the U.S. Holder acquired the
Senior Note. In the case of an accrual method taxpayer, gain or loss
attributable to fluctuations in exchange rates will equal the difference between
(i) the U.S. dollar value of the foreign currency principal amount of the Senior
Note and any payment with respect to accrued interest, determined on the date
such payment is received or the note is disposed of, and (ii) the U.S. dollar
value of the foreign currency principal amount of the Senior Note, determined on
the date the U.S. Holder acquired the Senior Note, and the U.S. dollar value of
the accrued interest received, determined by translating such interest at the
average exchange rate for the accrual period. The foreign currency gain or loss
will be recognized only to the extent of the total gain or loss realized by a
U.S. Holder on the sale, exchange or retirement of the Senior Note. The source
of the foreign currency gain or loss will be determined by reference to the
residence of the U.S. Holder or the "qualified business unit" of the U.S. Holder
on whose books the Senior Note is properly reflected. Any gain or loss realized
by such a holder in excess of the foreign currency gain or loss will be capital
gain or loss.
Non-U.S. Holders
Under present United States federal tax law, and subject to the
discussion below concerning backup withholding:
(a) payments of principal, interest and premium on the Senior Notes by
AES or its paying agent to any Non-U.S. Holder will be exempt from the 30% U.S.
federal withholding tax, provided that (i) such Non-U.S. Holder does not own,
actually or constructively, 10% or more of the total combined voting power of
all classes of our stock entitled to vote and is not a controlled foreign
corporation related, directly or indirectly, to us through stock ownership and
(ii) the statement requirement set forth in Section 871(h) or Section 881(c) of
the Code has been fulfilled with respect to the beneficial owner, as discussed
below; and
(b) a Non-U.S. Holder of a Senior Note will not be subject to U.S.
federal income tax on gain realized on the sale, retirement or other taxable
disposition of such Senior Note, unless such gain is effectively connected with
the Holder's conduct of a trade or business in the United States.
The certification requirement referred to in subparagraph (a) will be
fulfilled if the beneficial owner of a Senior Note certifies on Internal Revenue
Service ("IRS") Form W-8BEN, under penalties of perjury, that it is not a United
States person and provides its name and address, and (i) such beneficial owner
files such Form W-8BEN with the withholding agent or (ii) in the case of a
Senior Note held by a securities clearing organization, bank or other financial
institution holding customers' securities in the ordinary course of its trade or
business holding the Senior Note on behalf of the beneficial owner, such
financial institution files with the withholding agent a statement that it has
received the Form W-8BEN from the Holder and furnishes the withholding agent
with a copy thereof. Prospective investors, including foreign partnerships and
their partners, should consult their tax advisers regarding possible additional
reporting requirements.
If a Non-U.S. Holder of a Senior Note is engaged in a trade or business
in the United States, and if interest on the Senior Note (or gain realized on
its sale, exchange or other disposition) is effectively connected with the
conduct of such trade or business, the Non-U.S. Holder, although exempt from the
withholding tax discussed in the preceding paragraphs, will generally be subject
to regular U.S. federal income tax on such effectively connected income in the
same manner as if it were
a U.S. Holder. See "--U.S. Holders" above. In lieu of the certificate described
in the preceding paragraph, such a Holder will be required to provide to the
withholding agent a properly executed IRS Form W-8ECI to claim an exemption from
withholding tax. In addition, if such Non-U.S. Holder is a foreign corporation,
it may be subject to a 30% branch profits tax (unless reduced or eliminated by
an applicable treaty) on its earnings and profits for the taxable year
attributable to such effectively connected income, subject to certain
adjustments.
Backup Withholding and Information Reporting
Information returns will be filed with the Internal Revenue Service in
connection with payments on the Notes and the proceeds from a sale or other
disposition of the Notes. If you are a U.S. Holder, you will be subject to a 31%
United States backup withholding tax on these payments unless you provide your
taxpayer identification number to the paying agent and comply with certain
certification procedures or otherwise establish an exemption from backup
withholding. If you are a Non-U.S. Holder, you may have to comply with
certification procedures to establish that you are not a United States person in
order to avoid information reporting and backup withholding tax requirements.
The certification on Form W-8BEN, required to claim exemption from 30% federal
withholding on interest payments as described above, will satisfy the
certification requirements necessary to avoid the 31% backup withholding tax as
well.
The amount of any backup withholding from a payment to you will be
allowed as a credit against your United States federal income tax liability and
may entitle you to a refund, provided that the required information is furnished
to the Internal Revenue Service.
GENERAL LISTING INFORMATION
The Senior Notes have been accepted for clearance through Euroclear and
Clearstream under Common Code No. 012516878. The ISIN for the Senior Notes is
XS0125168780.
Application has been made to list the Senior Notes on the Luxembourg
Stock Exchange. The certified Certificate of Incorporation of AES and the legal
notice relating to the issue of the Senior Notes will be deposited prior to any
listing with the Chief Registrar of the District Court in Luxembourg (Greffier
en Chef du Tribunal d'Arrondissement a Luxembourg), where such documents are
available for inspection and where copies thereof can be obtained upon request.
As long as the Senior Notes are listed on the Luxembourg Stock Exchange, an
agent for making payments on, and transfers of, Senior Notes will be maintained
in Luxembourg.
The consolidated financial statements of AES as of December 31, 1998
and 1999, and for each of the three years in the period ended December 31, 1999
have been prepared in accordance with United States generally accepted
accounting principles and have been audited by Deloitte & Touche LLP in
accordance with United States generally accepted auditing standards. On May 26,
2000, Deloitte & Touche LLP gave consent to the incorporation by reference in
the Registration Statement (Form S-3 No. 333-37924) and related prospectus of
AES, of their reports dated February 3, 2000 (February 22, 2000 as to the last
paragraph of Note 2) with respect to the consolidated financial statements of
AES.
For so long as the Senior Notes are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require, copies of the following
documents may be inspected at the specified office of the paying and transfer
agent in Luxembourg:
o Certified Certificate of Incorporation of AES;
o paying agency agreement;
o the Indenture relating to the Senior Notes, which include the
forms of the Senior Note certificates.
In addition, copies of the most recent annual audited consolidated
financial statements of AES for the preceding financial year, and any interim
unaudited consolidated quarterly financial statements published by AES, will be
available for collection at the specified office of the Paying Agent in
Luxembourg for so long as the Senior Notes are listed on the Luxembourg Stock
Exchange and the rules of such exchange so require. AES publishes only audited
annual and unaudited quarterly financial statements on a consolidated basis.
Except as disclosed in this document, AES represents that there has
been no material adverse change in its financial position since December 31,
1999.
Except as disclosed in this document, AES is not involved in any
litigation or arbitration proceedings relating to claims or amounts which are
material in the context of the issue of the Senior Notes nor, so far as AES is
aware, is any such litigation or arbitration pending or threatened.
The issuance of the Senior Notes was authorized by resolutions adopted
by the AES Board of Directors on April 21, 1998 and May 30, 2000 and resolutions
adopted by the AES Offering Committee on February 15, 2001.
AES has confirmed that it:
(a) has complied with, and will comply with, its obligations under the
relevant rules in relation to the admission to listing of the Senior Notes by
the time such Senior Notes are so admitted; and
(b) having made all reasonable inquiries, has not become aware of any
change in circumstances which could reasonably be regarded as significantly and
adversely affecting its ability to meet its obligations as issuer in respect of
the Senior Notes as they fall due.
UNDERWRITING
Subject to the terms and conditions stated in the underwriting
agreement dated February 15, 2001, each underwriter named below has agreed to
purchase, and AES has agreed to sell to such underwriter, the principal amount
of Senior Notes set forth opposite the name of such underwriter.
Name Principal Amount
of Senior Notes
Salomon Brothers International Limited ............. (pound)34,000,000
J.P. Morgan Securities Ltd. ........................ (pound)34,000,000
ABN AMRO Incorporated............................... (pound)8,500,000
Dresdner Bank AG London Branch ..................... (pound)8,500,000
-----------------
Total (pound)85,000,000
=================
The underwriting agreement provides that the obligations of the
underwriters to purchase the Senior Notes included in this offering are subject
to approval of certain legal matters by counsel and to certain other conditions.
The underwriters are obligated to purchase all the Senior Notes if they purchase
any of the Senior Notes.
The underwriters have advised AES that they propose to offer some of
the Senior Notes directly to the public at the public offering price set forth
on the cover page of this prospectus supplement and some of the Senior Notes to
certain dealers at the public offering price less a concession not in excess of
0.50% of the principal amount of the Senior Notes. The underwriters may allow,
and such dealers may reallow, a concession not in excess of 0.25% of the
principal amount of the Senior Notes on sales to certain other dealers. After
the initial offering of the Senior Notes to the public, the public offering
price and such concessions may be changed by the underwriters.
The following table shows the underwriting discounts and commissions to
be paid to the underwriters by AES in connection with this offering (expressed
as a percentage of the principal amount of the Senior Notes).
Paid by AES
-----------
Per Senior Note........................................ 1.50%
In connection with this offering, the underwriters may over-allot, or
engage in covering and stabilizing transactions. Over-allotment involves sales
of Senior Notes in excess of the principal amount of Senior Notes to be
purchased by the underwriters in this offering, which creates a short position.
Covering transactions involve purchases of the Senior Notes in the open market
after the distribution has been completed in order to cover short positions.
Stabilizing transactions consist of certain bids on purchases of Senior Notes
made for the purposes of preventing or retarding a decline in the market price
of the Senior Notes while the offering is in progress. These activities may
cause the price of the Senior Notes to be higher than the price that otherwise
would exist in the open market in the absence of such transactions. These
transactions may be effected in the over-the-counter market or otherwise and, if
commenced, may be discontinued at any time.
The Senior Notes are a new issue of securities, and there is currently
no established trading market for the Senior Notes. We have applied for the
Senior Notes to be listed on the Luxembourg Stock Exchange in accordance with
the rules thereof.
Each underwriter has agreed that: (i) it has not offered or sold, and
before the date six months after the date of issue of the Senior Notes will not
offer or sell, any Senior Notes to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, as
amended; (ii) it has complied, and will comply, with all applicable provisions
of the United Kingdom Financial Services Act 1986, as amended, and the Public
Offers of Securities Regulations 1995, as amended, with respect to anything done
by it in relation to the Senior Notes in, from or otherwise involving the United
Kingdom; and (iii) it has only issued or passed on, and will only issue or pass
on, in the United Kingdom any document received by it in connection with the
issuance of the Senior Notes to a person who is of a kind described in Article
11(3) of the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 (as amended) or is a person to whom the document may
otherwise lawfully be issued or passed on.
AES estimates that its total expenses of this offering will be
$200,000.
In the ordinary course of the underwriters' respective businesses, the
underwriters and their affiliates have engaged and may engage in commercial and
investment banking transactions with AES and its affiliates.
LEGAL MATTERS
The validity of the Senior Notes offered hereby and certain matters relating
thereto will be passed upon for us by Davis Polk & Wardwell, New York, New York.
Certain legal matters will be passed upon for the underwriters by Shearman &
Sterling, New York, New York.
EXPERTS
See "Experts" in the accompanying Prospectus.
PRINCIPAL EXECUTIVE OFFICE OF THE AES CORPORATION
The AES Corporation
1001 North 19th Street
Arlington, Virginia 22209
INDEPENDENT AUDITORS
Deloitte & Touche LLP
1750 Tysons Boulevard
Milton, Virginia 22102-4219
LEGAL ADVISORS
To The AES Corporation To the Underwriters
Davis Polk & Wardwell Shearman & Sterling
450 Lexington Avenue 599 Lexington Avenue
New York, New York 10017 New York, New York 10022
TRUSTEE, REGISTRAR, PRINCIPAL PAYING AGENT AND COMMON DEPOSITARY
Bank One, N.A., London Branch
1 Triton Square
London NW1 3FN
LUXEMBOURG STOCK EXCHANGE LISTING AGENT
AND PAYING AGENT Banque
Internationale a Luxembourg S.A.
69, Route d'Esch
L-2953 Luxembourg
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