EXHIBIT 5.1
[LETTERHEAD OF DAVIS POLK & WARDWELL]
March 25, 1998
The AES Corporation
1001 North 19th Street
Arlington, Virginia 22209
AES Trust II
c/o The AES Corporation
1001 North 19th Street
Arlington, Virginia 22209
Dear Ladies and Gentlemen:
We have acted as counsel for The AES Corporation (the "Company") and
AES Trust II (the "Trust") in connection with the Registration Statement on Form
S-3 (the "Registration Statement") filed by the Company and the Trust with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Securities Act"), relating to the registration of the Trust's $2.75 Term
Convertible Securities, series B, liquidation amount $50 per security (the
"TECONS") to be sold by certain holders of such TECONS. The TECONS were issued
pursuant to the provisions of the Amended and Restated Declaration of Trust
dated as of October 29, 1997 (the "Declaration") among the Company, as sponsor,
First Chicago Delaware Inc., The First National Bank of Chicago, sponsor, First
Chicago Delaware Inc., the First National Bank of Chicago, William R. Luraschi,
Barry J. Sharp and Willard Hoagland as trustees, and are guaranteed by the
Company to the extent described in the Preferred Securities Guarantee Agreement
dated as of October 29, 1997 (the Guarantee"). The Trust has acquired
$309,278,400 aggregate principal amount of 5.50% Junior Subordinated Convertible
Debentures (the "Debentures") with the proceeds from the sale of the TECONS and
the sale to the Company of the common securities of the Trust. The Debentures
were issued pursuant to the provisions of the Subordinated indenture dated as of
March 1, 1997 between the Company and the First National Bank of Chicago, as
trustee, as supplemented by a Second
The AES Corporation 2 March 25, 1998
Supplemental Indenture dated as of October 29, 1997 (the Indenture as so
supplemented is hereinafter referred to as the "Indenture").
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments as we have deemed necessary or advisable
for the purpose of rendering this opinion.
Based upon the foregoing, we are of the opinion that:
(i) the Debentures have been duly authorized and, assuming that
they have been executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Trust,
are valid and binding obligations of the Company, entitled to the
benefits of the Indenture, enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity, regardless of whether enforcement is sought in a proceeding at
law or in equity;
(ii) the Guarantee has been duly authorized, executed and
delivered by the Company and (assuming) due authorization, execution
and delivery threre of by the Guarantee Trustee), constitutes a valid
and binding agreement of the Company enforceable against the Company in
accordance with its terms, except that the enforcement thereof may be
subject to (bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of
equity, regardless of whether enforcement is sought in a proceeding at
law or in equity; and
(iii) the shares of Common Stock issuable upon conversion of the
Securities have been duly authorized by the company and validly
reserved for issuance by the Company upon such conversion by all
necessary corporate action and such Common Stock, when duly issued upon
such conversion, will be validly issued and fully paid and
non-assessable; no holder thereof is subject to personal liability
solely by reason of being
The AES Corporation 3 March 25, 1998
such a holder; and the issuance of such Common Stock upon such
conversion is not subject to preemptive rights.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the federal laws of the
United States of America and the General Corporation Law of the State of
Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In addition, we consent to the reference to us under the
caption "Legal Matters" in the Prospectus constituting a part of the
Registration Statement.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other purpose or
relied upon by or furnished to any other person without our prior written
consent.
Very truly yours,
/s/ Davis Polk & Wardwell
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