The unchanged Positive Outlook reflects potential that Hafslund’s financial risk profile could strengthen if credit metrics can be maintained at strong levels. This, however, depends on capex execution and realised electricity prices in the medium term.

The upgrade follows significant improvements in Hafslund’s financials, which are likely to last due to elevated power prices. Further upside is reflected by the Positive Outlook, assuming leverage does not exceed 2.0x beyond 2025.

Higher power prices have enabled significant deleveraging and expansion of the business through the purchase of the majority stake in Hafslund Oslo Celsio.

The issuer rating reflects Hafslund’s standalone credit quality of BBB and a one-notch uplift based on the City of Oslo ownership.