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 Borkum Riffgrund 2 Investor GmbH on 13 January 2023 for the A- rating on the senior secured notes with a current outstanding balance of EUR 503.1m.

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 A- rating reflects a total expected loss of 0.14% over the notes’ life until maturity, equivalent to a 3.24-year constant-exposure expected risk horizon. Key drivers are the low risks during operation, especially regarding sponsors and revenue generation, as well as the strong financial figures and the resilience to cash flow stress scenarios. The project features an almost fully amortising structure with a 12% balloon followed by a long remaining useful asset life.

Revenue generation was better than Scope’s expectations in the nine months ending September 2022. This was mainly due to the high wind speeds in January, February, April and July, as well as the sharp increase in energy prices in the third quarter of 2022 to well above the guaranteed tariff. As a result, EBITDA was 10% above Scope’s rating case assumptions in the nine months ending September 2022. The technical availability of the wind turbines and of the total project were also significantly higher than expected. Scope expects full-year cash flow to exceed its forecasts based on the 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 between 30 June 2021 and 30 June 2022 confirmed satisfactory financial ratios. The historical and projected debt service coverage ratios were 1.24 times and 1.41 times respectively, while the note life coverage ratio reached 1.37 times. The rolling 12-month debt service totalled EUR 97.5m by 30 June 2022 (30 June 2021: EUR 98.9m).

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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