Bulletin: If A One-Off, Orsted A/S Rating Could Absorb Potential Tax Increase On Two U.K. Wind Farms

PARIS (S&P Global Ratings) Dec. 3, 2020--S&P Global Ratings today said that the Danish Tax Agency's decision to levy taxes on Orsted A/S' U.K. offshore wind farms, Walney Extension and Hornsea 1, would have a one-off detrimental effect on credit metrics the year it is expensed. This could be absorbed at the current 'BBB+' rating, although it would consume part of Orsted's current rating headroom. However, we would need to reassess our base-case scenario if the Danish Tax Agency also imposes taxes on offshore projects developed after 2016. On Dec. 1, 2020, the Danish Tax Agency notified Orsted of its administrative decision requiring Danish taxation of two of the company's U.K. offshore wind farms, Walney Extension and Hornsea 1. The

...December 3, 2020 PARIS (S&P Global Ratings) Dec. 3, 2020--S&P Global Ratings today said that the Danish Tax Agency's decision to levy taxes on Orsted A/S' U.K. offshore wind farms, Walney Extension and Hornsea 1, would have a one-off detrimental effect on credit metrics the year it is expensed. This could be absorbed at the current '###+' rating, although it would consume part of Orsted's current rating headroom. However, we would need to reassess our base-case scenario if the Danish Tax Agency also imposes taxes on offshore projects developed after 2016. On Dec. 1, 2020, the Danish Tax Agency notified Orsted of its administrative decision requiring Danish taxation of two of the company's U.K. offshore wind farms, Walney Extension and Hornsea 1. The agency's claim amounts to Danish krone (DKK)5.1 billion (685 million), plus interest of DKK1.5 billion, for tax years 2015 and 2016. If Orsted has to pay the tax upfront as required by the Danish Tax Agency, we expect its adjusted funds from...

Bulletin