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

Scope performs monitoring reviews to determine whether outstanding ratings remains proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology/ies, 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 Agder Energi AS (BBB+/under review for a developing outcome) on 11 June 2021¹. 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 aims to resolve the review as soon as possible but notes that the original plan has been delayed. The ratings could be confirmed if ongoing merger talks were to fail, resulting in the status quo. If merger talks were to generate specific results and succeed, the rating outcome would be based on the future operational and financial setup of the merged group, with all directions (positive, negative and neutral) possible.

Scope anticipates that, following the initial decision by the municipalities and the boards to proceed with the Letter of Intent agreement, a final agreement will be reached during H2 2021. By this time, more information should be available on the companies’ business and financing structures. At that point, Scope could resolve the rating review. Scope also notes that both the Norwegian authorities and the municipality owners will have to give their final approval to the transaction.

Since Scope’s last update in December 2020, Agder Energi has achieved much higher power prices so far in 2021 than in 2020. This is seen as positive by Scope as it will reverse some of the pressure on selected credit metrics which the company experienced last year.

1. The year was amended after the initial publication. In the original announcement the year was 2020.

The methodologies applicable for the reviewed ratings and/or rating Outlooks (Rating Methodology: European Utilities, 18 March 2021; Corporate Rating Methodology,  26 February 2020; Government Related Entities, 5 May 2021) are 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 Henrik Blymke, Managing Director

© 2021 Scope SE & Co. KGaA and all its subsidiaries including Scope Ratings GmbH, Scope Ratings UK Limited, Scope Analysis GmbH, Scope Investor Services GmbH, and Scope ESG Analysis GmbH (collectively, Scope). All rights reserved. The information and data supporting Scope’s ratings, rating reports, rating opinions and related research and credit opinions originate from sources Scope considers to be reliable and accurate. Scope does not, however, independently verify the reliability and accuracy of the information and data. Scope’s ratings, rating reports, rating opinions, or related research and credit opinions are provided ‘as is’ without any representation or warranty of any kind. In no circumstance shall Scope or its directors, officers, employees and other representatives be liable to any party for any direct, indirect, incidental or other damages, expenses of any kind, or losses arising from any use of Scope’s ratings, rating reports, rating opinions, related research or credit opinions. Ratings and other related credit opinions issued by Scope are, and have to be viewed by any party as, opinions on relative credit risk and not a statement of fact or recommendation to purchase, hold or sell securities. Past performance does not necessarily predict future results. Any report issued by Scope is not a prospectus or similar document related to a debt security or issuing entity. Scope issues credit ratings and related research and opinions with the understanding and expectation that parties using them will assess independently the suitability of each security for investment or transaction purposes. Scope’s credit ratings address relative credit risk, they do not address other risks such as market, liquidity, legal, or volatility. The information and data included herein is protected by copyright and other laws. To reproduce, transmit, transfer, disseminate, translate, resell, or store for subsequent use for any such purpose the information and data contained herein, contact Scope Ratings GmbH at Lennéstraße 5 D-10785 Berlin.