EXHIBIT 8.1
[Letterhead of Davis Polk & Wardwell]
March 26, 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, 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 Supplemental Indenture dated as of October
29, 1997 (the Indenture as so supplemented is hereinafter referred to as the
"Indenture"). (The preceding documents to be collectively referred to as the
"Offering Document")
The AES Corporation March 26, 1998
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. In rendering our opinion, we have assumed the
accuracy of the Offering Documents and that the issuance of the TECONS will be
consummated in accordance with the terms therein.
Our opinion is based on the Internal Revenue Code of 1986, as amended,
administrative pronouncements, judicial decisions, and existing and proposed
Treasury Regulations, all as currently in effect, any of which may be changed
subsequent to the date of this letter, thereby potentially affecting the tax
consequences opined on herein. Based on the Foregoing, and assuming that the
Trustees will conduct the affairs of the Trust in accordance with the
Declaration, we hereby confirm our opinion that the Trust will be classified for
United States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation.
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