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 methodologies, including key rating assumptions and model. Scope publicly announces the completion of each monitoring review on its website.

Scope has completed on 26 November 2024 the monitoring review of the A- rating for the EUR 815.0m Senior notes, issued by Borkum Riffgrund 2 Investor Holding GmbH, maturing in 2028. The project has been in operation since September 2018.

The credit rating remains as follows:

Senior notes: EUR 815.0m maturing in 2028 outstanding: A-

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 (EL) of 0.09% over the life of the loan to maturity (equivalent to a 2.11-year constant-exposure expected risk horizon). We have calculated an expected impairment likelihood of 0.57% for the project (rated instrument), which corresponds with a probability of default strength of bbb in Scope’s idealised PD curve. The total (average) expected recovery rate on the project’s credit impairment events is 85.15%.

Key drivers are the low operational risks, particularly in terms of sponsors and revenue generation, as well as the strong financial metrics and resilience to cash flow stress scenarios. The project has an almost fully amortising structure with a 12% balloon followed by a long remaining useful asset life.

The transaction continues to perform broadly in line with expectations with adequate debt service coverage ratios. Key performance indicators are slightly weaker than rating case assumptions for H1 2024, including production (-2%), revenues (-2.8%) and EBITDA (-6.5%). Lower than expected wind speeds and higher uncompensated losses related to negative price events, grid disruptions and WTG outages (such as the R32 WTG), were the main reasons for the slight underperformance.

The 12-month backward-looking debt service coverage ratio (DSCR) was 1.29x to June 2024 compared with the rating case forecast of 1.33x.

The methodologies applicable for the reviewed rating (General Project Finance Rating Methodology, 15 November 2024; Counterparty Risk Methodology, 10 July 2024) 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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