AES CORPAES
AES CORP Debt Disclosure
OBLIGATIONS
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NON-RECOURSE DEBT — Non-recourse debt represents debt issued by one of our subsidiaries to be repaid solely from the subsidiary's assets. Repayments of the loans, and interest thereon, is secured solely by the capital stock, physical assets, contracts, and cash flows of that subsidiary, and the Parent Company is not otherwise liable for such debt. The following table summarizes the carrying amount and terms of non-recourse debt at our subsidiaries, excluding amounts classified as held for sale, as of the periods indicated (in millions):
| NON-RECOURSE DEBT | Weighted Average Interest Rate | Maturity | December 31, | ||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| Variable Rate: | |||||||||||||||||||||||
Bank loans | 5.61% | 2026 - 2040 | $ | 5,746 | $ | 5,132 | |||||||||||||||||
| Notes and bonds | — | 105 | |||||||||||||||||||||
Revolver borrowings | 5.47% | 2026 - 2030 | 1,441 | 3,147 | |||||||||||||||||||
| Other | 9.13% | 2028 - 2030 | 20 | 16 | |||||||||||||||||||
| Fixed Rate: | |||||||||||||||||||||||
| Bank loans | 6.19% | 2026 - 2067 | 3,933 | 2,610 | |||||||||||||||||||
| Notes and bonds | 5.24% | 2026 - 2055 | 12,203 | 11,737 | |||||||||||||||||||
Other (1) | 6.71% | 2026 - 2061 | 177 | 297 | |||||||||||||||||||
| Unamortized (discount) premium & debt issuance (costs), net | (342) | (301) | |||||||||||||||||||||
| Subtotal | $ | 23,178 | $ | 22,743 | |||||||||||||||||||
Less: Current maturities (2) (3) | (2,211) | (2,670) | |||||||||||||||||||||
Noncurrent maturities (2) (3) | $ | 20,967 | $ | 20,073 | |||||||||||||||||||
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(1) Other fixed rate debt included $250 million related to preferred shares that included mandatory redemption features at Bellefield Equity Holdings and were therefore classified as a liability under ASC 480 as of December 31, 2024.
(2) Excludes $21 million and $18 million (current) and $714 million and $553 million (noncurrent) finance lease liabilities included in the respective non-recourse debt line items on the Consolidated Balance Sheets as of December 31, 2025 and 2024, respectively. See Note 15—Leases for further information.
(3) Includes $1.3 billion (current) and $10.5 billion (noncurrent) of non-recourse debt related to VIEs as of December 31, 2025.
The interest rate on variable rate debt represents the total of a variable component that is based on changes in an interest rate index and a fixed component. The Company has interest rate swap agreements designated as accounting hedges that economically fix the variable component of the interest rates on the portion of the variable
rate debt being hedged in an aggregate notional principal amount of approximately $3.4 billion on non-recourse debt outstanding at December 31, 2025.
The following table summarizes the amounts due under our non-recourse debt agreements for the next five years and thereafter, as of December 31, 2025 (in millions):
| December 31, | Annual Maturities | ||||
| 2026 | $ | 2,221 | |||
| 2027 | 3,554 | ||||
| 2028 | 2,418 | ||||
| 2029 | 2,010 | ||||
| 2030 | 4,628 | ||||
| Thereafter | 8,689 | ||||
| Unamortized (discount) premium & debt issuance (costs), net | (342) | ||||
| Total | $ | 23,178 | |||
As of December 31, 2025, AES subsidiaries had approximately $1.9 billion in various unused committed credit lines to support their working capital, debt service reserves, and other business needs. These credit lines can be used for borrowings, letters of credit, or a combination of these uses.
Significant transactions — During the year ended December 31, 2025, the following subsidiaries of the Company had significant debt issuances (in millions):
| Subsidiary | Issuances (1) | ||||
| AES Clean Energy | $ | 2,456 | |||
| AES Puerto Rico Solar | 1,064 | ||||
| AES Pacifico Chile | 712 | ||||
| AES Andes | 520 | ||||
| AES El Salvador | 384 | ||||
| AES Ohio | 375 | ||||
AES Indiana | 350 | ||||
(1)These amounts do not include revolving credit facility activity at the Company's subsidiaries.
AES Pacifico Chile — During the years ended December 31, 2025 and 2024, several renewables development projects owned by AES Pacifico Chile executed project financing agreements with aggregate commitments of up to $1.7 billion to support the development and construction of wind and solar plants. As of December 31, 2025, there were $875 million in borrowings under the agreements, maturing in 2029 and 2030.
AES Ohio — In August 2025, AES Ohio issued $375 million aggregate principal of 4.55% First Mortgage Bonds due August 2030. The net proceeds from this issuance were used to repay existing indebtedness, including its unsecured $150 million term loan due in October 2025 and $195 million outstanding under its revolving credit agreement maturing in March 2030, and for general corporate purposes at AES Ohio.
AES Indiana — In August 2025, AES Indiana issued $350 million aggregate principal of 5.05% First Mortgage Bonds due August 2035. The net proceeds from this issuance were used to repay existing indebtedness, including the remaining $300 million outstanding on its unsecured term loan due in October 2025 and $30 million outstanding under its revolving credit agreement maturing in March 2030, and for general corporate purposes at AES Indiana.
In March 2024, AES Indiana issued $650 million aggregate principal of 5.70% First Mortgage Bonds due April 2054. The net proceeds from this issuance were used to repay existing indebtedness, including its unsecured $300 million term loan due in November 2024 and amounts outstanding under its $350 million revolving credit agreement maturing in December 2027, and for general corporate purposes at AES Indiana.
In March 2024, IPALCO issued $400 million aggregate principal of 5.75% senior secured notes due April 2034. In April 2024, the net proceeds from this issuance, together with cash on hand, were used to redeem the outstanding $405 million of IPALCO’s 3.70% senior secured notes due in September 2024.
AES El Salvador — In July 2025, our distribution companies operating in El Salvador entered into a credit agreement for $341 million, bearing interest at 3-month SOFR plus 3.50%, maturing in 2032. The net proceeds were used to repay existing indebtedness of $206 million, with the remainder used for dividend distributions. As a result of the refinancing, the Company recognized a loss on extinguishment of $1 million.
AES Puerto Rico Solar — The Marahu project, 70% owned by AES, is currently constructing the Salinas and Jobos renewables projects in Puerto Rico, including both solar and energy storage facilities. In July 2025, the Marahu project executed a tax credit transfer bridge loan agreement for total commitments of $230 million, at interest rates of SOFR plus a margin of 1.25% to 2.25%, maturing in April 2027. As of December 31, 2025, there was $206 million in borrowings under the agreement.
In October 2024, the Marahu project obtained a loan guarantee for $861 million from the U.S. Department of Energy and began drawing on the loan in the first quarter of 2025. As of December 31, 2025, there was $871 million, inclusive of capitalized interest, in outstanding borrowings, maturing in 2049. The remainder of the loan will be drawn upon as required to fund construction costs.
AES Andes — In March 2025, AES Andes issued $400 million aggregate principal of 6.25% senior notes due in 2032. The net proceeds from the issuance were used to redeem the remaining $228 million aggregate principal of its 6.35% junior subordinated notes due in 2079 and to repay other existing indebtedness. As a result of the latter transaction, the Company recognized a loss on extinguishment of debt of $3 million.
In March 2024, AES Andes issued $500 million aggregate principal of 6.30% senior unsecured notes due in 2029. The net proceeds from the issuance were used to purchase via tender offer $100 million and $43 million aggregate principal of its 6.35% and 5.00% notes due in 2079 and 2025, respectively, and repay other existing indebtedness.
In June 2024, AES Andes issued $530 million in Junior Subordinated Notes at 8.15%, due in 2055. The proceeds were used to repay its 7.125% notes due in 2079. As a result of the transaction, the Company recognized a loss on extinguishment of debt of $8 million.
AES Clean Energy — In December 2024, Bellefield 2 Seller, LLC executed a construction, tax equity bridge, and letter of credit financing agreement for commitments of up to $1.7 billion. As of December 31, 2025, there were $901 million in borrowings at an interest rate of 5.05% maturing in 2026 and $295 million in borrowings under the facilities at an interest rate of 5.17%, maturing in 2027.
In November 2024, AES Clean Energy, AES Clean Energy Development, and Bellefield Equity Holdings LLC ("Bellefield") entered into several key agreements with HASI, including an investment agreement under which HASI invested $250 million in Bellefield in exchange for a preferred membership interest. AES Clean Energy held a call option under which there was an unconditional obligation to redeem HASI’s preferred shares in Bellefield at the earlier of the substantial completion date or December 1, 2026, with the redemption amount consisting of the initial investment plus a 10% internal rate of return. As the call option on the preferred shares included mandatory redemption features, the instrument was classified as a liability under ASC 480 and was recorded at its fair value, which equaled the gross proceeds received of $250 million. The instrument was accreted to its redemption amount using the effective interest method. In December 2025, Bellefield 1 achieved substantial completion and the preferred shares were redeemed for $278 million, concurrently with the execution of the Bellefield 2 Equity Holdings LLC investment agreement. See Note 17—Redeemable Stock of Subsidiaries for further information.
In December 2023, Bellefield Portfolio Seller, LLC and Bellefield 1 Finco, LLC, subsidiaries of AES Clean Energy Development, executed a construction, tax equity bridge, and letter of credit financing agreement for commitments of up to $2.4 billion due in 2027. As of December 31, 2025, there was $1.2 billion in outstanding borrowings under the facilities, and the net proceeds were used primarily to repay existing indebtedness and to fund development of renewables projects.
AES Clean Energy Development, AES Renewable Holdings, and sPower, an equity method investment, collectively referred to as the Issuers, entered into a Master Indenture agreement in 2022 whereby long-term notes will be issued from time to time to finance or refinance operating wind, solar, and storage projects that are owned by the Issuers. Each of the Issuers is considered a “Co-Issuer” and will be jointly and severally liable with each other
Co-Issuer for all obligations under the facility. During the year ended December 31, 2025, the Issuers issued $823 million in 6.70% notes issued due May 2050, and $346 million in 6.08% notes issued due November 2050, resulting in an aggregate principal outstanding of $3.3 billion. As a result of the notes issued in 2025 and net of repayments, AES Clean Energy Development and AES Renewable Holdings recorded, in aggregate, an increase in liabilities of $1.1 billion, resulting in an aggregate carrying amount of notes at consolidated subsidiaries of $2.5 billion as of December 31, 2025.
AES Clean Energy Development, AES Renewable Holdings, and sPower, collectively referred to as the Borrowers, executed two Credit Agreements for revolving credit facilities in 2021 and subsequent amendments in the following years for aggregate commitments of up to $4 billion with maturity dates in May and June 2028. Each of the Borrowers is considered a “Co-Borrower” and will be jointly and severally liable with each other Co-Borrower for all obligations under the facilities. As a result of increases in commitments used and net of repayments, AES Clean Energy Development and AES Renewable Holdings recorded, in aggregate, a decrease in liabilities of $1.3 billion in 2025, resulting in total commitments used under the revolving credit facilities, as of December 31, 2025, of $1.6 billion at consolidated subsidiaries. As of December 31, 2025, the aggregate commitments used under the revolving credit facilities for the Co-Borrowers was $1.8 billion.
AES Puerto Rico — On June 1, 2023, AES Puerto Rico was unable to pay principal and interest obligations on its Series A Bond Loans due to insufficient funds resulting from financial difficulties at the business. AES Puerto Rico signed forbearance and standstill agreements with its noteholders in July 2023 because of the insufficiency of funds to meet these obligations. On March 5, 2024, AES Puerto Rico and its noteholders executed a financial restructuring, under which the $156 million (including interest) of 6.625% Series A Bond Loans due 2026 was exchanged for $112 million of 6.625% senior secured bonds due January 2028 and $44 million of preferred shares in AES Puerto Rico. The preferred shares bear interest at 3.125% and contain an option whereby AES may call the preferred shares to be converted into 99.9% of the ordinary shares of AES Puerto Rico between December 30, 2025 and December 30, 2027, or would have the option to settle the preferred shares in cash. The noteholders also provided a $23 million bridge loan due March 2026 bearing interest at prime plus 4%, which was fully repaid in October 2025. AES Puerto Rico is required to make mandatory prepayments through cash sweeps based on excess cash (as defined in the loan agreements) available from operations on the bridge loan, senior secured bonds, and preferred shares interest. The financial restructuring was accounted for as a troubled debt restructuring in accordance with ASC 470-60, “Troubled Debt Restructurings by Debtors” as AES Puerto Rico was experiencing financial difficulties and the lenders granted a concession. No gain has been recognized as a result of this transaction. As of December 31, 2025, cash settlement of the preferred shares is contingent, as the amounts would not be required to be settled in cash if the option to settle the preferred shares with common shares is exercised.
Non-Recourse Debt Covenants, Restrictions and Defaults — The terms of the Company's non-recourse debt include certain financial and nonfinancial covenants. These covenants are limited to subsidiary activity and vary among the subsidiaries. These covenants may include, but are not limited to, maintenance of certain reserves and financial ratios, minimum levels of working capital and limitations on incurring additional indebtedness.
As of December 31, 2025 and 2024, approximately $531 million and $147 million, respectively, of restricted cash was maintained in accordance with certain covenants of the non-recourse debt agreements. Of these amounts, $451 million and $79 million, respectively, were included within Restricted cash and $80 million and $68 million, respectively, were included within Debt service reserves and other deposits in the accompanying Consolidated Balance Sheets. As of December 31, 2025 and 2024, approximately $153 million and $155 million, respectively, of the restricted cash balances were for collateral held to cover potential liability for current and future insurance claims being assumed by AGIC, AES' captive insurance company. Of total restricted cash and debt service reserves of $780 million, $458 million related to VIEs as of December 31, 2025.
Various lender and governmental provisions restrict the ability of certain of the Company's subsidiaries to transfer their net assets to the Parent Company. Such restricted net assets of subsidiaries amounted to approximately $1.8 billion at December 31, 2025.
The following table summarizes the Company's subsidiary non-recourse debt in default (in millions) as of December 31, 2025. Due to the defaults, these amounts are included in the current portion of non-recourse debt:
| Primary Nature of Default | December 31, 2025 | ||||||||||||||||
| Subsidiary | Debt in Default | Net Assets (Liabilities) | |||||||||||||||
| AES Ilumina (Puerto Rico) | Covenant | 20 | 60 | ||||||||||||||
The above default is not a payment default, but is instead a technical default triggered by failure to comply with covenants or other requirements contained in the non-recourse debt documents of the subsidiary.
In November 2025, AES Puerto Rico received a full and complete waiver for all previous events of default. As such, as of December 31, 2025, the AES Puerto Rico debt balance of $143 million was not in default.
The AES Corporation's recourse debt agreements include cross-default clauses that will trigger if a subsidiary provides 20% or more of the Parent Company's total cash distributions from businesses for the four most recently completed fiscal quarters and has an outstanding principal in excess of $200 million in default. As of December 31, 2025, the Company's subsidiaries had no defaults which resulted in a cross-default under the recourse debt of the Parent Company. In the event the Parent Company is not in compliance with the financial covenants of its revolving credit facilities, restricted payments will be limited to regular quarterly shareholder dividends at the then-prevailing rate. Payment defaults and bankruptcy defaults would preclude the making of any restricted payments.
RECOURSE DEBT — Recourse debt represents debt that the Parent Company has an obligation to settle. This can be debt issued directly by the Parent Company or debt issued by a subsidiary under which the Parent Company has explicit commitments such as guarantees, indemnities, letters of credit, or agreements to settle if the subsidiary defaults. The following table summarizes the carrying amount and terms of recourse debt as of the periods indicated (in millions):
| Interest Rate | Final Maturity | December 31, 2025 | December 31, 2024 | ||||||||||||||||||||
| Senior Unsecured Note | 3.30% | 2025 | $ | — | $ | 900 | |||||||||||||||||
| Commercial paper outstanding borrowings | 2026 | 79 | — | ||||||||||||||||||||
| Senior Unsecured Note | 1.375% | 2026 | 800 | 800 | |||||||||||||||||||
| Drawings on revolving credit facility | % | 2027 | 300 | — | |||||||||||||||||||
| Senior Unsecured Note | 5.45% | 2028 | 900 | 900 | |||||||||||||||||||
| Senior Unsecured Note | 3.95% | 2030 | 700 | 700 | |||||||||||||||||||
| Senior Unsecured Note | 2.45% | 2031 | 1,000 | 1,000 | |||||||||||||||||||
| Senior Unsecured Note | 5.80% | 2032 | 800 | — | |||||||||||||||||||
| Junior Unsecured Note | 7.60% | 2055 | 950 | 950 | |||||||||||||||||||
| Junior Unsecured Note | 6.95% | 2055 | 500 | 500 | |||||||||||||||||||
| Unamortized (discount) premium & debt issuance (costs), net | (45) | (46) | |||||||||||||||||||||
| Subtotal | $ | 5,984 | $ | 5,704 | |||||||||||||||||||
| Less: Current maturities | (879) | (899) | |||||||||||||||||||||
| Noncurrent maturities | $ | 5,105 | $ | 4,805 | |||||||||||||||||||
The following table summarizes the principal amounts due under our recourse debt for the next five years and thereafter (in millions):
| December 31, | Annual Maturities | ||||
| 2026 | $ | 879 | |||
| 2027 | 300 | ||||
| 2028 | 900 | ||||
| 2029 | — | ||||
| 2030 | 700 | ||||
| Thereafter | 3,250 | ||||
| Unamortized (discount) premium & debt issuance (costs), net | (45) | ||||
| Total recourse debt | $ | 5,984 | |||
Senior Unsecured Term Loan due December 2026 — In October 2025, the Company executed a $300 million senior unsecured term loan agreement, maturing in December 2026. As of December 31, 2025, AES had no outstanding drawings under the loan agreement.
Senior Unsecured Term Loan due December 2026 — In June 2025, the Company executed a $500 million senior unsecured term loan agreement, maturing in June 2026. In November 2025, the Company executed an amendment extending the maturity date of the loan agreement to December 2026. As of December 31, 2025, AES had no outstanding drawings under the loan agreement.
Senior Notes due 2032 — In March 2025, the Company issued $800 million aggregate principal of 5.80% senior notes due in 2032. The Company used the proceeds from this issuance to purchase via tender offer a portion of its 3.30% senior notes due in 2025. As a result of the latter transaction, the Company recognized a gain on extinguishment of debt of $2 million.
Subordinated Notes due January 2055 — In May 2024, the Company issued $950 million aggregate principal of 7.60% fixed-to-fixed reset rate subordinated notes due in January 2055. AES allocates the net proceeds from this offering to one or more eligible green projects, which may include the development or redevelopment of such projects. Pending such allocation, the net proceeds from the offering are used for general corporate purposes.
Subordinated Notes due July 2055 — In December 2024, the Company issued $500 million aggregate principal of 6.95% fixed-to-fixed reset rate subordinated notes due in July 2055. AES utilized the net proceeds from this offering to repay existing indebtedness, including borrowings under the revolving facility of its senior credit facility and commercial paper program.
Commercial Paper Program — In March 2023, the Company established a commercial paper program under which the Company may issue unsecured commercial paper notes (the “Notes”) up to a maximum aggregate face amount of $750 million outstanding at any time. In April 2025, the Company executed agreements to increase the maximum aggregate face amount to $1.5 billion outstanding at any time. The maturities of the Notes may vary but will not exceed 397 days from the date of issuance. The proceeds of the Notes will be used for general corporate purposes. The Notes will be sold on customary terms in the U.S. commercial paper market on a private placement basis. The commercial paper program is backed by the Company's $1.8 billion in revolving credit facilities, and the Company cannot issue commercial paper in an aggregate amount exceeding the then available capacity under its revolving credit facilities. During 2025, the Company borrowed approximately $59.9 billion and repaid approximately $59.8 billion under the commercial paper program, with average daily outstanding borrowings of $709 million. As of December 31, 2025, the Company had $79 million outstanding borrowings under the commercial paper program with a weighted average interest rate of 4.10%. The Notes are classified as current.
Revolving Credit Facilities — In December 2024, AES executed a $300 million senior unsecured revolving credit facility, maturing in December 2026. The aggregate commitment under its previously existing revolving credit facility is $1.5 billion and matures in August 2027. As of December 31, 2025, AES had $300 million in outstanding drawings under its revolving credit facilities.
Recourse Debt Covenants and Guarantees — The Company's obligations under the indentures governing the senior notes due 2025 and 2030 are currently unsecured following the achievement of two investment grade ratings and the release of security in accordance with the terms of the facility and the notes. If the Company’s credit rating falls below "Investment Grade" from at least two of Fitch Investors Service Inc., Standard & Poor’s Ratings Services or Moody’s Investors Service, Inc., as determined in accordance with the terms of the revolving credit facility and indenture dated May 15, 2020 (BBB-, or in the case of Moody’s Investor Services, Inc. Baa3), then the obligations under the indentures governing the senior notes due 2025 and 2030 become, subject to certain exceptions, secured by (i) all of the capital stock of domestic subsidiaries owned directly by the Company or certain subsidiaries and 65% of the capital stock of certain foreign subsidiaries owned directly by the Company and certain subsidiaries, and (ii) certain intercompany receivables, certain intercompany notes, and certain intercompany tax sharing agreements.
Each revolving credit facility contains customary covenants and restrictions on the Company's ability to engage in certain activities, including, but not limited to, limitations on liens; restrictions on mergers and acquisitions and the disposition of assets; and other financial reporting requirements.
Each revolving credit facility also contains one financial covenant, evaluated quarterly, requiring the Company to maintain a maximum ratio of recourse debt to adjusted operating cash flow of 5.75 times.
The terms of the Company's senior notes contain certain customary covenants, including limitations on the Company's ability to incur liens or enter into sale and leaseback transactions.
SUPPLIER FINANCING ARRANGEMENTS — With some purchases, the Company enters into supplier financing arrangements with the goal of securing improved payment terms. The Company confirms supplier invoices to an intermediary financial institution who will pay the supplier directly or reimburse the Company for payments made to the supplier. These arrangements are included in Supplier financing arrangements on the Consolidated Balance Sheets in Current liabilities as the amounts are all due in less than a year; the related interest expense is recorded on the Consolidated Statements of Operations within Interest expense.
The following table shows a rollforward for outstanding supplier financing arrangements for the years ended December 31, 2025 and 2024 (in millions):
| 2025 | 2024 | |||||||||||||
| Balance at January 1 | $ | 917 | $ | 974 | ||||||||||
| Invoices confirmed during the year | 1,380 | 1,737 | ||||||||||||
| Confirmed invoices paid during the year | (1,681) | (1,794) | ||||||||||||
| Balance at December 31 | $ | 616 | $ | 917 | ||||||||||
As of December 31, 2025, these agreements ranged from less than $1 million to $51 million with a weighted average interest rate of 6.72%. Of the amounts outstanding under supplier financing arrangements as of December 31, 2025, $391 million were guaranteed, including $204 million guaranteed by the Parent Company and $187 million guaranteed by subsidiaries.
As of December 31, 2024, these agreements ranged from less than $1 million to $69 million with a weighted average interest rate of 6.83%. Of the amounts outstanding under supplier financing arrangements as of December 31, 2024, $616 million were guaranteed, including $245 million guaranteed by the Parent Company and $371 million guaranteed by subsidiariesHistorical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 11, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 24, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.