Scope Ratings GmbH (Scope) monitors and reviews its credit ratings on an ongoing basis and at least annually, or every six months in the case of sovereigns, sub-sovereigns and supranational organisations.

Scope performs monitoring reviews to determine whether material changes and/or changes in macroeconomic or financial market conditions could have an impact on the credit ratings. Scope considers all available and relevant information when undertaking the monitoring review.

Monitoring reviews are conducted by performing a peer comparison, benchmarking against the rating-change drivers, and/or reviewing the credit ratings’ performance over time, as deemed appropriate by the Lead Analyst or Analytical Team Head, in addition to an assessment of all aspects of the relevant methodology/ies, including key rating assumptions and model(s). Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for CPPIB Renewables Europe Sàrl on 16 December 2022:

Senior secured notes, current outstanding balance EUR 439.9m: BBB+

This monitoring note does not constitute a credit rating action, nor does it indicate the likelihood that Scope will conduct a credit rating action in the short term. Information about the latest credit rating action connected with this monitoring note along with the associated rating history can be found on www.scoperatings.com.

Key rating factors

The BBB+ rating reflects a total expected loss of 0.53% over the notes’ life until maturity (equivalent to a 4.95-year constant-exposure expected risk horizon). Key drivers are the solid track record so far and low risks during the operating phase, especially with regard to the sponsors and revenue generation. The economic value of cash flows and the extensive experience and strong economic incentives of the sponsors and operators mitigate the risks contributed by the project structure and its financial strength.

The Covid-19 pandemic has had no significant impact on the project to date.

The better-than-expected revenue generation in the last 12 months was mainly due to unexpectedly high wind speeds in the fourth quarter of 2021 and the first quarter of 2022, as well as sharp increase in energy prices in the third quarter of 2022, which were above the tariff level. On a nine-month basis at the end of September 2022, this resulted in an operating cash flow that was 10% above Scope’s rating case assumptions. The technical availability of the wind turbines and the total project was significantly higher than expected. Scope expects full-year cash flow to exceed its forecasts based on year-to-date performance.

Credit metrics have remained robust and well within Scope’s rating case assumptions. The most recent compliance certificate for the period 30 April 2022 to 31 October 2022 confirmed strong financial ratios. The historical and projected debt service coverage ratios were 1.85 times and 1.61 times respectively, while the note life coverage ratio reached 1.46 times. Debt service totaled EUR 49.3m in 2022 (2021: EUR 49.7m).

The methodologies applicable for the reviewed rating (General Project Finance Rating Methodology, 16 November 2022; Counterparty Risk Methodology, 14 July 2022) are available on https://scoperatings.com/governance-and-policies/rating-governance/methodologies.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst Torsten Schellscheidt, Managing Director

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