Fitch Affirms Indianapolis Power & Light & IPALCO; Outlook to Positive

Business Wire, April 1, 2008

CHICAGO -- Fitch Ratings has affirmed the 'BBB-' Issuer Default Ratings (IDRs) for both Indianapolis Power & Light Company (IPL) and IPALCO Enterprises, Inc. (IPALCO) and revised the Rating Outlook to Positive for both entities. See complete rating list below. As of year-end 2007, IPALCO had $750 million of debt, and IPL had $898 million of debt.

IPL's ratings reflect its low business risk profile and strong credit metrics. The utility operations have low exposure to fuel price volatility, a constructive regulatory environment in Indiana, and decreasing environmental exposure from investments in environmental controls at its coal-fired plants. IPL operations provide stable cash flows, and credit metrics are strong versus peers and its current rating categories. IPALCO's ratings reflect the structural subordination of its debt to that of IPL and the reliance on distributions from IPL to service debt as well as operating expenses.

The Rating Outlook revision to Positive also reflects Fitch's increasing comfort with the ratings linkage and inter-relationship between the companies and their ultimate parent, The AES Corporation (AES; IDR rated 'B ' by Fitch). Fitch believes that AES will continue to operate its Indiana utility operations with an investment grade financial profile, and that AES maintains the necessary financial flexibility to operate without pressuring the credit metrics of IPALCO or IPL.

IPALCO is a holding company whose principal subsidiary is IPL, which is a regulated electric utility principally engaged in providing generation, transmission, distribution and sale of electric energy to more than 465,000 customers in the Indianapolis metropolitan area. About 99% of IPL's power generated (3,353 MW net summer capability) is coal-fired. IPL plans for a reserve margin of approximately 14%. IPALCO is a wholly owned subsidiary of AES.

Fitch has affirmed and revised the Rating Outlook on the following ratings to Positive:

Indianapolis Power & Light Company

--IDR at 'BBB-';

--First mortgage bonds at 'BBB ';

--Secured PCRBs at 'BBB ';

--Unsecured PCRBs at 'BBB';

--Preferred stock at 'BBB-'.

IPALCO Enterprises, Inc.

--IDR at 'BBB-';

--Senior notes at 'BBB-'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.