Scope Ratings GmbH (Scope) monitors and reviews its credit ratings on an ongoing basis and at least annually, or every six months in the cases of sovereigns, sub-sovereigns and supranational organisations that may act as a lender of last resort.

Scope performs monitoring reviews to determine whether material changes and/or changes in macro-economic 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 rating’s 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 announces the result of each monitoring review on its website and/or on its subscription platform ScopeOne.

Scope completed the monitoring review for Vestland County Municipality (long-term issuer and senior unsecured debt ratings in local and foreign currency: AA+/Stable; short-term ratings in local and foreign currency: S-1+/Stable) on 29 July 2025.

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 ratings history can be found on scoperatings.com.

Key rating factors

The County of Vestland’s AA+ ratings are underpinned by a well-integrated institutional framework for Norwegian counties. The institutional framework ensures financial stability and underpins operational resilience through fiscal equalisation, central grants, and proactive government support, balancing autonomy with oversight to maintain fiscal discipline and address disparities. Scope's evaluation of the institutional arrangements sets an indicative rating range for Norwegian counties from AAA to AA, within which individual ratings are positioned.

Vestland’s ratings are further driven by a strong individual credit profile underpinned by i) conservative financial planning and strong debt affordability despite high debt levels; ii) a solid liquidity position and adequate reserve funds, providing a robust financial buffer; iii) predictable income from free revenues as well as additional revenue sources from power concessions and aquaculture funds; and iv) well-controlled exposure to low-risk contingent liabilities.

Challenges relate to a high debt burden and a rising debt trajectory driven by significant capital expenditure, especially in transport and education, and rising interest expenditure. While nominal debt continued to rise, Vestland’s gross debt-to-operating revenue ratio stabilised around 96% in 2024 due to a simultaneous increase in operating revenues. Nevertheless, the ratio remains significantly above the county average (excluding Oslo), which stands at around 77%, indicating elevated leverage relative to peers. To ease budgetary pressures, Vestland will draw down discretionary funds, allowing for transfers of around 3.5% of operating revenue from operating to investment spending.

The Stable Outlook represents Scope’s view that risks to the ratings are balanced over the coming 12 to 18 months.

The ratings could be upgraded if: i) reforms to the institutional framework materially strengthened regions’ integration in institutional arrangements; and/or ii) Vestland’s individual credit profile strengthened significantly, especially via the reduction of the debt burden.

Conversely, the ratings could be downgraded if: i) the Kingdom of Norway’s ratings/outlooks were downgraded; ii) reforms to the institutional framework materially weakened regions’ integration in institutional arrangements; and/or iii) Vestland’s individual credit profile weakened significantly.

The methodology applicable for the reviewed ratings and/or rating Outlooks (Sub-Sovereigns Ratings methodology, 11 October 2024) is available on 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: Elena Klare, Analyst

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