AES · 10-Q · 2026Q2 · Full report

Interest Rate Environment

AES CORP · 2026-08-04 · Importance 18 · Surprise 14 · Matches filing data

AES reported higher interest expense of $721 million for the six months ended June 30, 2026, up $27 million, or 4%, year over year. The increase primarily reflected a higher weighted average interest rate and debt balance at the Parent Company, the prior-year realized gain on a de-designated interest-rate swap, and lower capitalized interest at Renewables because fewer projects were under construction. The filing states that changes in interest rates and the availability and cost of capital could affect refinancing existing debt and financing capital expenditures, acquisitions, investments, and other corporate purposes.

Key facts

• On a consolidated basis, of the Company’s $31.7 billion of total gross debt outstanding as of June 30, 2026, approximately $9.9 billion accrues interest at variable rates. source
• As of June 30, 2026, the total maximum outstanding amount of hedges protecting the Company against current and expected variable rate exposure on project financing was $9.5 billion. source
• Interest expense increased $16 million, or 5%, to $368 million for the three months ended June 30, 2026 compared to $352 million in the three months ended June 30, 2025, primarily due to higher debt balances and lower capitalized interest at the Renewables SBU and higher interest expense at the Parent due to a higher weighted average interest rate and debt balance; partially offset by lower debt balances at the Energy Infrastructure SBU. source
• Interest expense increased $27 million, or 4%, to $721 million for the six months ended June 30, 2026 compared to $694 million for the six months ended June 30, 2025, primarily due to higher interest expense at the Parent Company driven by a higher weighted average interest rate and debt balance and the impact of a prior year realized gain on a de-designated interest rate swap, and lower capitalized interest at the Renewables SBU due to fewer projects under construction; partially offset by lower debt balances at the Energy Infrastructure SBU. source

Impact estimates