Scope Ratings reviews its ratings either yearly, or at least every six months in the case of sovereign, sub-sovereign and supranational issuers. Monitoring reviews are unrelated to the calendar that outlines public finance rating actions.

Scope performs monitoring reviews to determine whether outstanding ratings remain proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology, latest developments, and the rated entity’s financial and operational aspects relative to similarly rated peers; or through targeted reviews on an individual credit. Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for Denmark (AAA/Stable; S-1+/Stable) on 24 June 2020. This monitoring note does not constitute a rating action nor does it indicate the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated rating history can be found on www.scoperatings.com.

Key rating factors

Scope’s assignment of Denmark’s AAA ratings reflects a wealthy and competitive economy, strong macro-economic, fiscal and monetary governance institutions and a stable political environment. In addition, a robust external sector, including sizeable foreign currency reserves backing the country’s long-standing peg of the Danish krone to the euro and a lengthy record of current account surpluses, is a credit strength. Denmark has, thus far, bridged the 2020 crisis commendably, having closed the economy early on with re-opening having begun before peer countries since April. However, Denmark's small and open economy leaves the country vulnerable to external shocks. Tepid medium-run growth potential is, moreover, an area requiring continued policy attention. Vulnerabilities in the Danish financial system, including high levels of household debt, can be exacerbated should macro-financial imbalances be allowed to continue building up or the 2020 crisis were to re-intensify.

The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (Public Finance and Sovereign Ratings, 21 April 2020) is available on https://www.scoperatings.com/#!methodology/list.

This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.

Lead analyst: Dennis Shen, Director

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