Scope RatingsGmbH (“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, performs a monitoring review.

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. As part of the monitoring review, Scope considers all available and relevant information when undertaking the monitoring review.

Monitoring reviews are conducted either by performing a peer comparison, benchmarking against the rating change drivers, and/or a review of the credit ratings` performance over time, as deemed appropriate by the Lead Analyst or the 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 Agder Energi AS (BBB+/under review for a developing outcome) on 16 September 2021.

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 on the credit ratings of 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) being possible.

Following an initial decision by the owners and the boards to proceed with the agreement in the letter of intent, Scope anticipates that a final agreement and conditions will be submitted for approval by the individual owners in Q1 2022. More information should be available on the companies’ business and financing structures by that time, and thus Scope anticipates resolving the rating review by then. Scope also notes that the Norwegian authorities will have to give their final approval for the transaction to take place.

In late August 2021, Agder Energi released its Q2 2021 report, which demonstrated that the trend with much higher power prices in 2021 than in 2020 is positive for the company. Scope considers this to be largely in line with our base case expectations stated previously, which will continue to reverse the pressure that some of the selected credit metrics put on the company last year.

The methodologies applicable for the reviewed rating and/or rating Outlook (Corporate Rating Methodology, 6 July 2021; Rating Methodology: European Utilities, 18 March 2021; Rating Methodology: 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 Thomas Faeh, Executive Director

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