Fitch Withdraws 'D' Ratings on AES Eastern Energy LP

Fitch Ratings has withdrawn the 'D' ratings on $433.1 million of outstanding debt for AES Eastern Energy LP (AEE). A full rating list is shown below.

Fitch has withdrawn the ratings due to AEE's Chapter 11 bankruptcy filing that occurred on Dec. 30, 2011. The trust certificate debt was structured to be serviced by cash flow from lease payments made by AEE under two leveraged leases.

As part of its Chapter 11 reorganization filing, AEE has agreed in principal to sell the Somerset and Cayuga coal-fired power plants to a subset of its existing trust certificate-holders under a non-binding term sheet dated Dec. 30, 2011. The two coal-fired plants are expected to remain in operation during the bankruptcy case.

AEE is a special purpose entity that is indirectly wholly owned by AES Corporation, which is rated 'B+' with a Stable Outlook by Fitch. AEE operates four coal-fired electricity generating facilities with a gross capacity of 1,169 megawatts. Of the four plants AEE operates, AEE leases two: the Somerset and Cayuga plants. AEE sells electricity into the spot market at prevailing New York Independent System Operator wholesale market prices.

Fitch has withdrawn the following ratings:

AES Eastern Energy Pass-Through Trusts:

--$165 million outstanding series 1999-A certificates, due 2017 (downgraded to 'D' from 'C' on Jan. 3, 2012);

--$268 million outstanding series 1999-B certificates, due 2029 (downgraded to 'D' from 'C' on Jan. 3, 2012).

Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--'Rating Criteria for Thermal Power Projects' (June 20, 2011);

--'Rating Criteria for Infrastructure and Project Finance' (Aug. 16, 2011).

Applicable Criteria and Related Research:

Rating Criteria for Infrastructure and Project Finance
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=648832

Rating Criteria for Thermal Power Projects
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=639073

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