S&P Flags Rising AES Gener Leverage

S&P has revised AES Gener’s outlook to negative from stable and affirmed the Chile-based power provider’s BBB minus ratings. The outlook change reflects increasing leverage to finance the company’s intensive capex plan to incorporate efficient coal fired generation capacity, amid a highly volatile cashflow environment. “We expect the company to reach peak levels of debt to Ebitda of about 3.5x during construction period (compared with 3.2x in 2008) and to start reducing that ratio to levels more in line with the BBB minus rating category once the new projects come on line (2010-2011),” the agency says.