CONSENT SOLICITATION STATEMENT. AES Panamá, S.R.L. Solicitation of Consents with respect to

Transcription

1 CONSENT SOLICITATION STATEMENT AES Panamá, S.R.L. Solicitation of Consents with respect to EXECUTION VERSION THIS CONSENT SOLICITATION STATEMENT IS BEING FURNISHED ON OR ABOUT SEPTEMBER 19, 2016 TO THE HOLDERS (AS DEFINED BELOW) OF THE NOTES (AS DEFINED BELOW) AS OF 5:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 19, 2016 (THE RECORD DATE ). THE CONSENT SOLICITATION (AS DEFINED BELOW) WILL EXPIRE AT 12:00 P.M., NEW YORK CITY TIME, ON SEPTEMBER 26, 2016, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE EXPIRATION TIME ). CONSENTS TO THE PROPOSED AMENDMENT (AS DEFINED BELOW) MAY BE REVOKED AT ANY TIME UP TO, BUT WILL BECOME IRREVOCABLE UPON, THE AMENDMENT EXECUTION DATE (AS DEFINED BELOW). THE PAYMENT OF THE CONSENT FEE (AS DEFINED BELOW) IS SUBJECT TO CERTAIN CONDITIONS DESCRIBED IN THIS CONSENT SOLICITATION STATEMENT % Senior Notes due 2022 CUSIP Nos: (Rule 144A) 00107T AA6; (Reg S) P0608C AA0 ISIN Nos: (Rule 144A) US00107TAA60; (Reg S) USP0608CAA01 Common Code Nos: (Rule 144A) ; (Reg S) Consent Fee: $2.50 per $1,000 principal amount of the Notes In this Consent Solicitation Statement and the accompanying consent letter (the Consent Letter ), AES Panamá, S.R.L. (the Company ) is soliciting (the Consent Solicitation ) the consents of the holders of record (the Holders ) on the Record Date of its 6.000% Senior Notes due 2022 (the Notes ) to an amendment (the Proposed Amendment ) to the Indenture, dated as of June 18, 2015 (the Indenture ), among the Company, as Issuer, and Deutsche Bank Trust Company Americas, as Indenture Trustee (in such capacity, the Trustee ), Securities Intermediary and Collateral Agent. The Proposed Amendment will amend clause (2)(i) of Section 9.06 (Limitation on Restricted Payments) of the Indenture to increase the dollar amount in that clause from $25 million to $60 million, which will provide the Company the flexibility over the life of the Notes until their maturity to make Restricted Payments, including dividends, of up to $60 million pursuant to that clause. For additional information regarding the Proposed Amendment, see DESCRIPTION OF THE PROPOSED AMENDMENT herein. Capitalized terms used herein and not otherwise defined shall have the respective meanings ascribed to them in the Indenture. Adoption of the Proposed Amendment requires the consent of the Holders of not less than a majority in aggregate principal amount of the outstanding Notes (the Requisite Consents ). Subject to the satisfaction or waiver of the General Conditions (as defined herein), immediately following receipt of the Requisite Consents, the Company intends to effectuate the Proposed Amendment by the Company and the Trustee executing and delivering a supplemental indenture to the Indenture which will contain the Proposed Amendment (the Supplemental Indenture ) and having the Supplemental Indenture registered with the Superintendency of the Securities Markets of the Republic of Panama ( SMV ). In the event the Proposed Amendment becomes effective, the Company will pay a consent fee (the Consent Fee ) to each Holder whose duly executed consent is received and accepted prior to the Expiration Time and not revoked prior to the Amendment Execution Date (as defined herein). The Consent Fee will be $2.50 for each $1,000 in principal amount of Notes with respect to which a consent is received, accepted and not revoked as aforesaid and will be paid promptly following the Expiration Time and the effectiveness of the Proposed Amendment. See CONSENT PROCEDURES Consent Fee. The solicitation agent (the Solicitation Agent ) for this Solicitation is Deutsche Bank Securities

2 This Consent Solicitation Statement is dated September 19, The valid completion, execution and delivery of the Consent Letter by a Holder prior to the Expiration Time will constitute delivery of consent by such Holder to the Proposed Amendment. Only Holders of record as of the Record Date may submit a consent. A duly executed consent shall bind any subsequent registered Holder or transferee of the Notes to which such consent relates. As of the date hereof, all of the Notes are held through The Depository Trust Company ( DTC ) by participants in DTC ( DTC Participants ) including Euroclear System, or Euroclear, and Clearstream Banking, société anonyme, Luxembourg, or Clearstream, as well as Central Latinoamericana de Valores, S.A., or Latinclear, which is a clearing house that is a participant in Clearstream. Any beneficial owner of Notes may direct the DTC Participant through which such beneficial owner s Notes are held in DTC to execute, on such beneficial owner s behalf, or may obtain a proxy from such DTC Participant and execute directly, as if such beneficial owner were a registered holder, a consent with respect to Notes beneficially owned by such beneficial owner. As of the Record Date, approximately $300 million aggregate principal amount of Notes was outstanding. Consents may be revoked at any time up to, but will become irrevocable upon, the execution and delivery of the Supplemental Indenture (the Amendment Execution Date ). The transfer of Notes after the Record Date will not have the effect of revoking any consent validly delivered to the Tabulation Agent. Upon the effectiveness of the Supplemental Indenture, all Holders of Notes, including non-consenting Holders, and all transferees of Notes will be bound by the Proposed Amendment. The Company has appointed D.F. King & Co., Inc. as information agent (in such capacity, the Information Agent ) and as tabulation agent (in such capacity, the Tabulation Agent ) for purposes of the Consent Solicitation. Consents should be sent to the Tabulation Agent in accordance with the instructions set forth in CONSENT PROCEDURES How to Consent, herein. Consents should be sent to the Tabulation Agent and not to the Company, the Trustee, the Solicitation Agent or any other person. None of the Company, its affiliates, the Solicitation Agent, the Tabulation Agent or the Information Agent makes any recommendation as to whether or not the Holders should give their consent to approve the Proposed Amendment. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS CONSENT SOLICITATION STATEMENT AND THE CONSENT LETTER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THE DELIVERY OF THIS CONSENT SOLICITATION STATEMENT AND THE CONSENT LETTER AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. NEITHER THIS CONSENT SOLICITATION STATEMENT NOR THE CONSENT LETTER CONSTITUTES AN OFFER TO SELL OR THE CONSENT SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES DESCRIBED OR OTHERWISE REFERRED TO IN THIS CONSENT SOLICITATION STATEMENT. 2

3 CONSENT PROCEDURES How to Consent Only Holders of the Notes as of the Record Date may execute and deliver a consent. DTC is expected to grant an omnibus proxy authorizing each DTC Participant to deliver a consent. Accordingly, for the purposes of the Consent Solicitation, the term Holder shall be deemed to mean record holders and DTC Participants who held Notes through DTC as of the Record Date. In order to cause a consent to be given with respect to Notes held through DTC, such DTC Participant must properly complete and sign the Consent Letter and mail, hand deliver, send by overnight courier or send by facsimile (confirmed promptly by physical delivery of an original) such Consent Letter to the Tabulation Agent at the address set forth on the back cover page of this Consent Solicitation Statement. A beneficial owner of an interest in Notes held through a DTC Participant must contact such DTC Participant in order to direct that a consent be given by such DTC Participant with respect to such Notes. Giving a consent will not affect a Holder s right to sell or transfer the Notes. All consents received on or before the Expiration Time will be effective notwithstanding a record transfer of such Notes subsequent to the Record Date, unless the Holder revokes such consent prior to the Amendment Execution Date by following the procedures set forth under Revocation of Consents below. Any consents by a Holder who is a DTC Participant must be executed in exactly the same manner as such Holder s name is registered with DTC. If a consent is signed by a trustee, partner, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must so indicate when signing and must submit with the consent form appropriate evidence of authority to execute the consent. In addition, if a consent relates to less than the total principal amount of Notes which such Holder holds directly or through DTC, the Holder must list the principal amount of Notes which such Holder holds to which the consent relates. If no principal amount of the Notes as to which a consent is delivered is specified, the Holder will be deemed to have consented to the Proposed Amendment with respect to the entire aggregate principal amount of Notes which such Holder holds directly or indirectly through DTC. The ownership of Notes held through DTC by DTC Participants shall be established by a DTC security position listing provided by DTC as of the Record Date. All questions as to the validity, form and eligibility (including time of receipt) of the consent procedures will be determined by the Company in its sole discretion, which determination will be final and binding, subject only to such final review as may be prescribed by the Trustee concerning proof of execution and ownership. The Company reserves the right to reject any or all consents that are not in proper form or the acceptance of which could, in the opinion of the Company or its counsel, be unlawful. Any interpretation of the terms and conditions of the Consent Solicitation (including the instructions in this Consent Solicitation Statement and in the Consent Letter) by the Company shall be final and binding. The Company also reserves the right, subject only to such final review as the Trustee prescribes for the proof of execution and ownership, to waive any defects or irregularities in connection with deliveries of particular consents. Any waiver by the Company of a defect shall not obligate the Company to waive any other defect. Unless waived by the Company, in its sole discretion, any defects or irregularities in connection with Consent Letters must be cured within such time as the Company determines. None of the Company, its affiliates, the Tabulation Agent, the Information Agent, the Solicitation Agent, the Trustee or any other person shall be under any duty to give any notification of any defects, irregularities or waivers, nor shall any of them incur any liability for failure to give any such notification. Deliveries of consents will not be deemed to have been made until any irregularities or defects therein have been cured or waived. The Company s interpretations of the terms and conditions of the Consent Solicitation shall be conclusive and binding. Consent Fee If the Proposed Amendment becomes effective by the receipt of the Requisite Consents, the execution and delivery of the Supplemental Indenture and the registration of the Supplemental Indenture with the SMV, then promptly following the Expiration Time and the effectiveness of the Supplemental Indenture, the Company will pay the Consent Fee to each Holder of Notes from which the Tabulation Agent received and accepted consents prior to 3

4 the Expiration Time pursuant to the terms of this Consent Solicitation Statement and who have not validly revoked such consents prior to the Amendment Execution Date. The Consent Fee will not be made to any Holder if (1) the Requisite Consents are not received prior to the Expiration Time, (2) the Consent Solicitation is terminated prior to the time the Proposed Amendment becomes effective, (3) the Supplemental Indenture is not executed by the Company and the Trustee, is not registered with the SMV or does not otherwise become effective for any reason or (4) the execution or registration of the Supplemental Indenture or payment of the Consent Fee is prohibited by any law, regulation or proceeding. See Conditions to the Consent Solicitation below. The right to receive the Consent Fee is not transferrable with any Note. The Company will only make payment of the Consent Fee to Holders who have properly granted consents prior to the Expiration Time pursuant to the terms of this Consent Solicitation Statement and who have not validly revoked such consents prior to the Amendment Execution Date. Interest will not accrue or be payable with respect to the Consent Fee. Revocation of Consents Each properly completed and executed consent will be counted, notwithstanding any transfer of the Notes to which such consent relates, unless the procedure for revocation of consents described below has been followed. Prior to the Amendment Execution Date, any Holder may revoke any consent given as to its Notes or any portion of such Notes. In order to be effective, a notice of revocation of consent must (i) contain the name of the person who delivered the consent and the Notes to which it relates and the aggregate principal amount of the Notes represented by such revocation, (ii) be in the form of a subsequent consent marked Do Not Consent to the Proposed Amendment, (iii) be signed by the Holder thereof in the same manner as the original signature on the consent and (iv) be received, prior to the Amendment Execution Date, by the Tabulation Agent at its address set forth on the back cover page of this Consent Solicitation Statement. A purported notice of revocation that lacks any of the required information or is dispatched to an improper address will not be effective to revoke a consent previously given. Any Holder who validly revokes its consent will not receive a Consent Fee, unless and until a subsequent consent from such Holder has been validly delivered prior to the Expiration Time and not validly revoked prior to the Amendment Execution Date. The right to revoke consents will terminate at the Amendment Execution Date. Any consents delivered after the Amendment Execution Date will not be revocable. The transfer of Notes after the Record Date will not have the effect of revoking any consent validly delivered to the Tabulation Agent. If a revocation is signed by a trustee, partner, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person must so indicate when signing and must submit with the revocation appropriate evidence of authority to execute the revocation. A revocation of the consent will be effective only as to the Notes listed on the revocation and only if such revocation complies with the provisions of this Consent Solicitation Statement. Only a Holder is entitled to revoke a consent previously given by it. A beneficial owner of Notes who is not the Holder of such Notes must arrange with the Holder to execute and deliver, either to the Tabulation Agent on such beneficial owner s behalf or to such beneficial owner for forwarding to the Tabulation Agent by such beneficial owner, a revocation of any consent already given with respect to such Notes. All questions as to the form and validity (including time of receipt) of any revocation of a consent will be determined by the Company in its sole discretion, which determination will be conclusive and binding, subject only to such final review as may be prescribed by the Trustee concerning proof of execution and ownership. None of the Company, its affiliates, the Tabulation Agent, the Information Agent, the Solicitation Agent, the Trustee or any other person shall be under any duty to give any notification of any defects or irregularities with respect to any revocation of a consent nor shall any of them incur any liability for failure to give any such notification. 4

5 Conditions to the Consent Solicitation The Consent Solicitation (including the payment of the Consent Fee in respect thereof) is conditioned upon: the receipt of the Requisite Consents by the Tabulation Agent prior to the Expiration Time (which consents shall not have been validly revoked); the execution and delivery of the Supplemental Indenture by the Company and the Trustee; the registration of the Supplemental Indenture with the SMV and the SMV s approval thereof, as described below; and the absence of any existing or proposed law or regulation that would, and the absence of any injunction or action or other proceeding that (in the case of any action or proceeding, if adversely determined) would, make unlawful or invalid or enjoin or delay (i) the implementation of the Proposed Amendment, (ii) the entering into of the Supplemental Indenture or (iii) the payment of the Consent Fee, or question the legality or validity of any thereof (the General Conditions ). The General Conditions are for the Company s sole benefit and may be asserted by the Company, in its sole discretion, regardless of the circumstances giving rise to such conditions or may be waived by the Company, in whole or in part, in its sole discretion. The Company has not made a decision as to what circumstances would lead the Company to waive any such condition, and any such waiver would depend on circumstances prevailing at the time of such waiver. Any determination by the Company concerning the events described in this section will be final and binding on all Holders. Notwithstanding the foregoing, the Company and the Trustee shall not execute and deliver the Supplemental Indenture unless and until the Requisite Consents have been received. The Company may at any time, in its sole discretion, allow the Consent Solicitation to lapse, terminate the Consent Solicitation, extend the Consent Solicitation and continue soliciting Consents pursuant to the Consent Solicitation or otherwise amend the terms of the Consent Solicitation. Effectiveness of the Proposed Amendment SUMMARY OF PROPOSED AMENDMENT Subject to the satisfaction or waiver of the General Conditions, immediately following receipt of the Requisite Consents, the Company intends to effectuate the Proposed Amendment by the Company and the Trustee executing and delivering the Supplemental Indenture and having the Supplemental Indenture registered with the SMV. Pursuant to the securities law of Panama, the effectiveness of any amendment to an indenture registered with the SMV, including the Indenture governing the Notes, is conditioned upon the registration of such amendment with the SMV. The Company has commenced the registration process by filing with the SMV an application requesting approval of the Proposed Amendment, together with copies of this Consent Solicitation Statement, the Consent Letter and the Supplemental Indenture. Once the Requisite Consents have been obtained and the Supplemental Indenture has been executed, the Company will file the executed Supplemental Indenture, along with evidence of the Requisite Consents, with the SMV to complete the registration process. Once the Supplemental Indenture has been registered with the SMV, the Supplemental Indenture will become effective. Upon the effectiveness of the Supplemental Indenture, all Holders of Notes, including non-consenting Holders, and all transferees of Notes will be bound by the Supplemental Indenture. Purpose of the Proposed Amendment Section 9.06 of the Indenture (Limitation on Restricted Payments) restricts, among other things, the ability of the Company to pay dividends or make distributions to the holders of its capital stock. The purpose of the Proposed Amendment is to provide the Company the flexibility over the life of the Notes until their maturity to make Restricted Payments, including dividends, of up to $60 million pursuant to clause (2)(i) of Section 9.06 of the 5

6 Indenture. Notwithstanding the additional flexibility the Company is seeking through the Proposed Amendments, the Company does not currently expect or intend to make restricted payments in the fiscal year 2016 that exceed the amounts permitted under the original terms of the Notes before reflecting the Proposed Amendment. For the year ended December 31, 2015 and the six months ended June 30, 2016, the Company had electricity sales of $299.1 million and $154.0 million, respectively, operating income of $69.4 million and $33.5 million, respectively, and net income of $42.9 million and $17.6 million, respectively. As of June 30, 2016, the Company had (i) total assets of $618.3 million, including current assets of $116.6 million, of which $37.4 million was cash and cash equivalents, (ii) total liabilities of $372.2 million, including total debt of $337.3 million and (iii) total stockholders equity of $139.0 million. Following the consummation of the Consent Solicitation, the Company may potentially raise additional capital through a debt financing of approximately $75 million, which may include issuing debt securities in the capital markets (including the issuance of additional Notes) (the Potential Financing ). The Proposed Amendment The Proposed Amendment amends clause (2)(i) of Section 9.06 of the Indenture to increase the dollar amount in that clause from $25 million to $60 million. Set forth below is a redlined version of Section 9.06 in its entirety, reflecting how the Proposed Amendment would change this covenant (deletions are reflected as strikethrough and additions are reflected as double underline). Section 9.06 Limitation on Restricted Payments. (1) The Issuer will not, and will not permit any Restricted Subsidiary to, directly or indirectly, take any of the following actions (each, a Restricted Payment ): (a) declare or pay any dividend or make any other payment or distribution with respect to any of the Issuer s or any Restricted Subsidiary s Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Issuer or any Restricted Subsidiary) or to the direct or indirect holders of the Issuer s or any Restricted Subsidiary s Equity Interests in their capacity as such (other than dividends, payments or distributions (x) payable in Equity Interests (other than Disqualified Stock) of the Issuer or (y) to the Issuer or a Restricted Subsidiary); (b) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Issuer or any Restricted Subsidiary) any Equity Interests of the Issuer or any Restricted Subsidiary or any Affiliate of the Issuer held by any Person (other than by the Issuer or any Restricted Subsidiary of the Issuer or as would constitute a Permitted Investment); (c) call for redemption or make any payment on or with respect to, or purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to the Stated Maturity thereof, any Subordinated Indebtedness except (x) in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, purchase, repurchase or other acquisition or (y) intercompany Indebtedness permitted to be incurred pursuant to clause (6) of Section 9.05 hereof; or (d) make any Investment (other than a Permitted Investment) in any Person, unless, at the time of and after giving pro forma effect to such Restricted Payment: (i) no Default or Event of Default will have occurred and be continuing or would occur as a consequence thereof; (ii) the Debt Service Reserve Account shall be Fully Funded; 6

7 (iii) the Issuer could Incur at least US$1.00 of additional Indebtedness pursuant to the first paragraph of Section 9.05 hereof; and (iv) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and the Restricted Subsidiaries after January 1, 2015 (excluding Restricted Payments permitted by clauses (b), (c), (d)(i), (e), (f) and (h) of the next succeeding paragraph (2)), is less than the sum, without duplication, of: (A) 100% of the Consolidated Net Income on a cumulative basis during the period (taken as one accounting period) beginning on January 1, 2015 and ending on the last day of the Issuer s last fiscal quarter ending prior to the date of such proposed Restricted Payment for which internal financial statements are available (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus (B) the aggregate Net Cash Proceeds received by the Issuer since the Issue Date as a contribution to its common equity capital or from the issue or sale of Equity Interests (other than Disqualified Stock) of the Issuer and the amount of reduction of Indebtedness of the Issuer or its Restricted Subsidiaries that has been converted into or exchanged for such Equity Interests (other than Equity Interests sold to, or Indebtedness held by, a Subsidiary of the Issuer or an employee stock ownership plan or similar trust financed by loans from or Guaranteed by the Issuer or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination) (less the amount of any cash or the Fair Market Value of other assets distributed by the Issuer or any Restricted Subsidiary upon such conversion or exchange), plus (C) with respect to Investments (other than Permitted Investments) made by the Issuer and any Restricted Subsidiary after the Issue Date, an amount equal to the net reduction in such Investments in any Person (except, in each case, to the extent any such amount is included in the calculation of Consolidated Net Income), resulting from (w) the repayment to the Issuer or any Restricted Subsidiary of loans or advances or from the receipt of Net Cash Proceeds from the sale of any such Investment, (x) from the release of any Guarantee (except to the extent any amounts are paid under such Guarantee), (y) from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries, or (z) any Person in which the Issuer or any Restricted Subsidiary had previously made an Investment becomes a Restricted Subsidiary; not to exceed, in each case, the amount of such Investments previously made by the Issuer or any Restricted Subsidiary in such Person. (2) So long as the Debt Service Reserve Fund is Fully Funded, the provisions of paragraph (1) of this Section 9.06 will not prohibit: (a) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture, and the redemption of any Subordinated Indebtedness within 60 days after the date on which notice of such redemption was given, if at said date of the giving of such notice, such redemption would have complied with the provisions of the Indenture; (b) the payment of any dividend by a Restricted Subsidiary to all the holders of its Common Stock on a pro rata basis; 7

8 (c) any Restricted Payment in exchange for, or out of the Net Cash Proceeds of a contribution to the common equity of the Issuer or a substantially concurrent sale (other than to a Subsidiary of the Issuer or an employee stock ownership plan or similar trust financed by loans from or Guaranteed by the Issuer or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination ) of, Equity Interests (other than Disqualified Stock) of the Issuer; provided that the amount of any such Net Cash Proceeds that are utilized for such Restricted Payment will be excluded from clause (iv)(b) of the preceding paragraph (1); (d) the redemption, repurchase, defeasance or other acquisition or retirement for value of Subordinated Indebtedness (i) in exchange for or with the net cash proceeds from a substantially concurrent Incurrence (other than to a Subsidiary of the Issuer) of, Permitted Refinancing Indebtedness or (ii) with any remaining Excess Proceeds following the consummation of an Offer to Purchase in accordance with Section 9.08; (e) the repurchase of Capital Stock deemed to occur upon the exercise of options or warrants to the extent that such Capital Stock represents all or a portion of the exercise price thereof and applicable withholding taxes, if any; (f) the payment of cash in lieu of fractional Equity Interests pursuant to the exchange or conversion of any exchangeable or convertible securities; provided, that such payment shall not be for the purpose of evading the limitations of this Section 9.06 (as determined by the Board of Administrators of the Issuer in good faith); (g) so long as no Default has occurred and is continuing or would be caused thereby, the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Issuer, or Preferred Stock of a Restricted Subsidiary, in each case issued in accordance with Section 9.05 and provided that such dividends constitute Fixed Charges ; (h) dividends, payments and other distributions pursuant to a tax sharing agreement or other similar arrangement to any equity owner of the Issuer or to any Person with whom the Issuer and its Restricted Subsidiaries, if any, file a consolidated, combined or similar tax return or with which the Issuer and its Restricted Subsidiaries, if any, are part of a consolidated, combined or similar group for tax purposes, provided that such dividends, payments and distributions do not exceed the amount of taxes the Issuer and its Restricted Subsidiaries collectively would have to pay on a stand alone basis as a separate corporate taxable entity; (i) so long as no Default has occurred and is continuing or would be caused thereby, other Restricted Payments in an aggregate amount not to exceed US$25.0 million US$60 million. The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued to or by the Issuer or such Subsidiary, as the case may be, pursuant to the Restricted Payment. [End of Section 9.06 of the Indenture] A clean copy of the form of Supplemental Indenture is attached hereto as Exhibit A-1. 8

9 CERTAIN REPUBLIC OF PANAMA TAX CONSIDERATIONS This discussion was written to support the promotion or marketing of the transactions or matters addressed herein and was not intended or written to be used, and cannot be used or relied upon by any person, for the purpose of avoiding Panamanian taxation. Each Holder should consult an independent tax advisor with respect to the Panamanian tax consequences of the transactions and matters addressed herein according to its particular circumstances. The following is a summary of certain Panamanian tax consequences of the Consent Solicitation to non- Panamanian Holders (as defined below). This summary is not intended to be a comprehensive description of all of the tax considerations that may be relevant to a decision regarding the Consent Solicitation. In addition, it does not describe any tax consequence (a) arising under the laws of any taxing jurisdiction other than Panama or (b) applicable to a resident of Panama or to a person with a permanent establishment in Panama. For purposes of this section, non-panamanian Holder means (i) any individual who is not a resident of Panama and is not domiciled in Panama; and (ii) any legal entity incorporated outside of Panama, provided that it does not conduct any trade or business through a permanent establishment in Panama or hold the Notes through a Panamanian branch. As a general rule, a non-panamanian individual will be deemed domiciled in Panama for tax purposes if such individual has resided or has remained in Panama for more than 183 calendar days during any twelve-month period. For purposes of this section, Panamanian Holder means (i) any individual who is a resident of Panama and is domiciled in Panama; and (ii) any legal entity incorporated in Panama or outside of Panama, provided that it does conduct any trade or business through a permanent establishment in Panama or hold the Notes through a Panamanian branch. As a general rule, a Panamanian individual will be deemed domiciled in Panama for tax purposes if such individual has resided or has remained in Panama for more than 183 calendar days during any twelve-month period. Consent Fee Income tax Panama s income tax is mainly territorial. Only income deemed to arise from Panamanian sources is subject to taxation. Income derived by Panamanian or foreign corporations or individuals which is not deemed to be Panamanian source income is not taxable. The term Panama-source income is defined in the Panama Tax Code (the Panama Code ) and includes any commercial or business activities carried out within the country, which includes, among others, the product of capital economically invested in Panama for performance of commercial or business activities carried within the country (i.e., interest) and the income received by legal entities or individuals domiciled outside of Panama derived from any service or act performed for the benefit of a legal entity or individual located inside of Panama as long as (i) the service or act contributes to the production or conservation of Panamasource income and (ii) the payment of said income to the legal entity or individual domiciled outside of Panama is deducted by the legal entity or individual domiciled inside of Panama as an expense in its income tax return. In the case of non-panamanian Holders, the Consent Fee constitutes income received by a legal entity or individual domiciled outside of Panama derived from an act performed for the benefit of a legal entity or individual located inside of Panama (in this case, the Company) that contributes to the production or conservation of Panamasource income and, therefore, the payment of the Consent Fee will be subject to income tax withholdings in Panama to the extent that the Company deducts such payment as an expense in its income tax return. Pursuant to Article 694 literal (e) of the Panama Code, tax withholdings over the Consent Fee payment will be applied at the general applicable income tax rates of article 699 or 700 of the Panama Code, over fifty percent (50%) of the total amount of the Consent Fee to be paid abroad to non-panamanian Holders, by the Company. For instance, in the case of corporations the applicable corporate tax rate is twenty five percent (25%), thus the effective rate at which the tax will be applied to the Consent Fee will be twelve point five percent (12.5%) as a result of it being equal to twenty five percent (25%) (corporate tax rate) of fifty percent (50%) of the Consent Fee. 9

10 Notwithstanding the foregoing, the income tax withholding rate may vary pursuant to the double taxation treaties, if any, between Panama and the countries in which the non-panamanian Holders are incorporated and/or reside In the case of Panamanian Holders, the Consent Fee will be considered ordinary Panama-source income, regardless of whether the Company deducts such payment as an expense in its income tax return or not, and, therefore, it will be subject to the payment of income tax in Panama and, as such, Panamanian Holders are required to include the Consent Fee payment as income in their tax return to be filed with the Panamanian tax authority. The Consent Fee will be paid to Panamanian Holders and to non-panamanian Holders who validly deliver their properly completed, executed and dated Consents to the Settlement Agent prior to the Expiration Time, and who do not validly revoke such consents prior to the Amendment Execution Date. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES The following is a general summary of certain U.S. federal income tax consequences to U.S. Holders (as defined below) of the Proposed Amendment and the Consent Fee. The summary does not address all of the tax consequences that may be relevant to a particular person in light of such person s individual circumstances or to persons subject to special treatment under U.S. federal income tax laws (such as financial institutions, brokerdealers, regulated investment companies, real estate investment trusts, insurance companies, U.S. expatriates, controlled foreign corporations, passive foreign investment companies, tax-exempt organizations, traders in securities who elect to apply a mark-to-market method of accounting, U.S. persons that have a functional currency other than the U.S. dollar, persons that are, or hold their Notes through partnerships or other pass-through entities, or persons who hold the Notes as part of a straddle, hedge, conversion, synthetic security, or constructive sale transaction for U.S. federal income tax purposes), all of whom may be subject to tax rules that differ from those summarized below. In addition, this discussion does not address the alternative minimum tax or any state, local or non-u.s. tax consequences or any U.S. federal tax considerations other than income taxation, nor does it address any tax consequences arising under the "Medicare" unearned income tax or surtax. This summary deals only with persons who hold the Notes as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment). AES Panamá has not sought any ruling from the U.S. Internal Revenue Service ( IRS ) with respect to any statement or conclusion in this discussion, and there can be no assurance that the IRS will not challenge such statement or conclusion in the following discussion or, if challenged, a court will uphold such statement or conclusion. The summary is based on the Internal Revenue Code of 1986, as amended (the Code ), the Department of Treasury regulations promulgated thereunder (the Treasury Regulations ), judicial decisions, published positions of the IRS, and other applicable authorities, all as in effect as of the date of this Consent Solicitation Statement and all of which are subject to change or differing interpretations (possibly with retroactive effect). This summary is not intended as tax advice. If an entity or arrangement that is treated as a partnership for U.S. federal income tax purposes holds a Note, the U.S. federal income tax treatment of a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Accordingly, partnerships that hold Notes and partners in such partnerships should consult their tax advisors about the U.S. federal income tax consequences of the Proposed Amendment and the Consent Fee. Beneficial owners of the Notes should consult their tax advisors to determine the particular tax consequences to them of the Proposed Amendment and the receipt of the Consent Fee, including the application and effects of any state, local and non-u.s. tax laws. Consequences to U.S. Holders For purposes of this summary, a U.S. Holder means a beneficial owner of a Note that is, or is treated, for U.S. federal income tax purposes, as (a) a citizen or individual resident of the United States, (b) a corporation (or other entity taxable as a corporation) created or organized in the United States or under the laws of the United States, (c) an estate the income of which is subject to U.S. federal income taxation regardless of its source, or (d) a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or 10

11 more U.S. persons have the authority to control all substantial decisions of the trust. As used herein, United States or U.S. means the United States of America (including the States and the District of Columbia). Effect of the Proposed Amendment. The U.S. federal income tax consequences to U.S. Holders will depend upon whether the Proposed Amendment and the payment of the Consent Fee result in a deemed exchange of the old or original Notes for new or modified Notes. Under the relevant Treasury Regulations, such a deemed exchange will occur if a significant modification (within the meaning of the Treasury Regulations) of the Notes has occurred, taking into account all relevant facts and circumstances, including payment of the Consent Fee. For these purposes, the general rule is that a modification is significant only if, based on all facts and circumstances (other than certain specified modifications), the legal rights or obligations that are altered and the degree to which they are altered are economically significant. The Treasury Regulations provide that a modification of a debt instrument that adds, deletes or alters customary accounting or financial covenants is not a significant modification. Those Treasury Regulations do not, however, define customary accounting or financial covenants. When testing a modification under the general rule, all modifications made to the debt instrument (other than those specified modifications for which specific rules are provided) are considered collectively. The Treasury Regulations further provide that a change in the yield of a debt instrument is a significant modification if the yield of the modified instrument (determined taking into account any accrued interest and any payments made to the holder as consideration for the modification) varies from the yield on the unmodified instrument (determined as of the date of the modification) by more than the greater of (a) one quarter of one percent (25 basis points) or (b) 5% of the annual yield of the unmodified instrument (0.05 x annual yield) (the Applicable Percentage ). The Company believes that the Proposed Amendment and the receipt of the Consent Fee should not cause a significant modification of the Notes under the applicable Treasury Regulations because (i) the Proposed Amendment is a modification that would alter customary accounting or financial covenants (ii) the legal rights and obligations that are altered in the Proposed Amendment and the degree to which they are altered are not economically significant based upon all of the facts and circumstances, and (iii) payment of the Consent Fee changes the yield of each Note by less than the Applicable Percentage. Consequently, the Company intends to treat the Proposed Amendment as not constituting a significant modification resulting in a deemed exchange of the Notes. Under such position, U.S. Holders (whether or not they consent) should not recognize any gain or loss for U.S. federal income tax purposes with respect to the Notes as a result of the Proposed Amendment (except to the extent of the Consent Fee, as described below) and U.S. Holders should continue to have the same adjusted tax basis and holding period in the Notes as they had immediately before the Proposed Amendment and the payment of the Consent Fee. The "significant modification" analysis under the applicable Treasury Regulations is not free from doubt; however, and it is possible that the IRS could treat the adoption of the Proposed Amendment and/or the receipt of the Consent Fee as a significant modification of the Notes for U.S. federal income tax purposes, resulting in a deemed exchange of the Notes. If the IRS were to take this position and prevail, then the tax consequences would differ, possibly materially, from the tax consequences described above. Treatment of the Consent Fee. The treatment of the Consent Fee under U.S. federal income tax law is not entirely clear. To the extent required to do so, the Company intends to treat the Consent Fee as ordinary income to U.S. Holders and to report such payments to such U.S. Holders and the IRS for information reporting purposes in accordance with such treatment. However, the IRS could take the position that the Consent Fee is treated first as a payment of accrued interest, to the extent of any accrued and unpaid interest, and second as a payment of principal on the Notes. This could impact the timing and amount of how future stated interest payments on the Notes are treated and have other consequences to Holders. U.S. Holders are encouraged to consult their tax advisers regarding the U.S. federal income tax treatment of the Consent Fee. THE U.S. FEDERAL INCOME TAX SUMMARY SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION PURPOSES ONLY. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS TO DETERMINE THE TAX CONSEQUENCES OF THE PROPOSED AMENDMENT AND THE RECEIPT OF THE CONSENT FEE IN LIGHT OF THEIR PARTICULAR CIRCUMSTANCES, INCLUDING THE APPLICATION OF U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX LAWS. 11

12 TABULATION AGENT AND INFORMATION AGENT D.F. King & Co., Inc. has been appointed as Tabulation Agent for the Consent Solicitation to receive, tabulate and verify consents. All consents and correspondence sent to the Tabulation Agent should be directed to the address set forth on the back cover of this Consent Solicitation Statement. D.F. King & Co., Inc. has agreed to facilitate the Consent Solicitation in its capacity as Tabulation Agent; however, it is not passing upon the merits or accuracy of the information contained in this Consent Solicitation Statement in its capacity as Tabulation Agent. D.F. King & Co., Inc. also will act as Information Agent with respect to the Consent Solicitation. Requests for additional copies of and questions relating to this Consent Solicitation Statement and other related documents may be directed to the Information Agent at the address and telephone number set forth on the back cover of this Consent Solicitation Statement. Holders of the Notes may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Consent Solicitation. In connection with the Consent Solicitation, directors, officers and regular employees of the Company (who will not be specifically compensated for such services) may solicit consents by use of the mails, personally or by telephone, facsimile or other means. The Company will pay the Tabulation Agent and the Information Agent reasonable and customary fees for its services and will reimburse it for its out-of-pocket expenses in connection therewith. The Company will also reimburse brokers and dealers for customary mailing and handling expenses incurred by them in forwarding copies of this Consent Solicitation Statement and related documents to the beneficial owners of Notes. SOLICITATION AGENT The Company has engaged Deutsche Bank Securities Inc. to act as the exclusive Solicitation Agent in connection with the Consent Solicitation. The Company will pay Deutsche Bank Securities Inc. reasonable and customary fees for its services as Solicitation Agent and will reimburse it for its reasonable out-of-pocket expenses in connection herewith. The Company has agreed to indemnify the Solicitation Agent against certain liabilities in connection with its services as Solicitation Agent. All inquiries and correspondence addressed to the Solicitation Agent relating to the Consent Solicitation should be directed to the address or telephone number set forth on the back cover page of this Consent Solicitation Statement. The Solicitation Agent assumes no responsibility for the accuracy or completeness of the information contained in this Consent Solicitation Statement or for any failure by the Company to disclose events that may affect the significance or accuracy of that information. The Solicitation Agent has provided in the past and may continue to provide other investment banking and financial advisory services to the Company and its affiliates and has received, and may continue to receive, customary compensation from the Company for such services. In the ordinary course of business, the Solicitation Agent or its affiliates may at any time hold long or short positions, and may trade for their own account or the account of customers, in the debt or equity securities of the Company or its affiliates, including any of the Notes and, to the extent that the Solicitation Agent or its affiliates hold Notes during the Consent Solicitation, it may provide consents relating to such Notes pursuant to the terms of this Consent Solicitation Statement. TRUSTEE The Trustee, an affiliate of the Solicitation Agent, assumes no liability or responsibility for any action or inaction of the Solicitation Agent, the Tabulation Agent or the Information Agent. The Trustee also assumes no responsibility for the accuracy or completeness of the information contained in this Consent Solicitation Statement, 12

13 for any failure by the Company to disclose events that may affect the significance or accuracy of that information, or any duty to verify any information contained herein. 13

14 WHERE YOU CAN FIND MORE INFORMATION ABOUT THE COMPANY The Company is incorporating by reference certain information in this Consent Solicitation Statement, which means that the Company is disclosing important information to you by referring you to those documents. The Company incorporates by reference into this Consent Solicitation Statement, the documents listed below, each as filed with the Bolsa de Valores de Panama, S.A. (the Panama Stock Exchange ) and made available at and as may be amended or supplemented from time to time. Such documents form an integral part of this Statement: the Company s annual report on Form IN-A for the years ended December 31, 2015 and December 31, 2014 with the independent auditor s report (the Annual Report ); the Company s quarterly report on Form IN-T for the quarterly period ended on March 31, 2016 (the 1 st Quarter Report ); and the Company s quarterly report on Form IN-T for the six months and quarterly period ended on June 30, 2016 (the 2 nd Quarter Report ). English language translations of the documents incorporated by reference into this Consent Solicitation Statement may be obtained at no cost at: Except where otherwise expressly specified herein, information on the websites of the Company and of the Panama Stock Exchange are not part of the Consent Solicitation and are not incorporated by reference in this Consent Solicitation Statement. Copies of each of the documents incorporated by reference into this Consent Solicitation Statement may also be obtained at no cost, by writing or calling the Company at the following address and telephone number: AES Panamá, S.R.L. Business Park II, Tower V, 11th Floor Paseo Roberto Motta, Costa del Este Panama City, Republic of Panama Phone: The Information Agent or the Company will also provide without charge to each Holder of Notes to whom this Consent Solicitation Statement and the Consent Letter are delivered, upon request of such person, a copy of the Indenture and of any information incorporated by reference. Any statement contained in this Consent Solicitation Statement or in a document (or part thereof) incorporated or considered to be incorporated by reference in this Statement shall be considered to be modified or superseded for purposes of this Consent Solicitation Statement to the extent that a statement contained in this Consent Solicitation Statement or in any other subsequently filed document (or part thereof) which is or is considered to be incorporated by reference in this Consent Solicitation Statement modifies or supersedes that statement. The modifying or superseding statement need not state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. Any statement so modified or superseded shall not be considered, except as so modified or superseded, to constitute part of this Consent Solicitation Statement. 14