Eksportfinans ASA

The stable outlook on Eksportfinans reflects our expectation that the former Norwegian export financing bank will continue to manage its rundown in a consistent manner. This includes maintaining a meaningful liquidity buffer to ensure that outstanding structured funding is covered. Eksportfinans' ownership structure is expected to remain unchanged and support continued high capital liquidity. We could lower the ratings if the bank's capital materially falls such that there is concern over the cushion available to bondholders. Similarly, we would view negatively a deterioration in Eksportfinans' liquidity portfolio, which also provides a buffer for eventualities related to the outstanding funding structure. Furthermore, operational risks persist given competence is now concentrated, and key personnel risk could negatively affect what we believe will

...Eksportfinans' management has shown the capacity to manage outstanding structured funding while an orderly wind-down advances. Over the past 10 years, Eksportfinans has capably managed the wind-down of much of its balance sheet. Total assets stood at Norwegian krone (NOK) 11.2 billion (1.1 billion) at March 31, 2021, compared with NOK215.5 billion at year-end 2010. A complex funding structure required ongoing management of derivatives as hedges. We now consider the complexity and size of the outstanding debt much lower, reducing risk of nonpayment. Our 'A-' rating incorporates the expectation that sizeable liquidity cushions will be available over the medium term. Although risks remain related to Eksportfinans' outstanding debt, both liquidity and capital buffers are ample. The bank held a liquidity buffer of about NOK7 billion (1.75x outstanding debt), with high quality liquid assets and cash, and a superior risk-adjusted capital (RAC) ratio of 126.2% at year-end 2020--reflecting shareholders'...

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