Eksportfinans ASA

The stable outlook on Eksportfinans reflects our expectation that the former export financing bank will continue to manage its rundown in a consistent manner. This includes maintaining a meaningful liquidity buffer to cover the outstanding structured funding. We expect Eksportfinans' ownership structure to remain unchanged and support continued high capital and liquidity. We could lower the ratings if the bank's capital materially fell such that doubts arose regarding the cushion available to bondholders. Similarly, we would view negatively a deterioration in Eksportfinans' liquidity portfolio because this also provides a buffer for eventualities related to the outstanding funding structure. Furthermore, operational risks persist given that competence is now concentrated, and key personnel risk could harm what we think will be a

...Eksportfinans' management has shown the capacity to manage outstanding structured funding while an orderly wind-down advances. Over the past 10 years, Eksportfinans has managed the wind-down of much of its balance sheet. Total assets stood at Norwegian krone (NOK) 10.37 billion (1.03 billion) at March 31, 2022, compared with NOK215.5 billion at year-end 2010. The complex funding structure requires the ongoing management of derivatives as hedges. That said, we consider the complexity and size of the outstanding debt as falling, reducing risk of nonpayment. We expect the sizable capital and liquidity cushions to remain over the medium term. Although risks to Eksportfinans' outstanding debt remain related, its liquidity and capital buffers are ample. The bank had a liquidity buffer of about NOK7.7 billion (758 million) equaling three-quarters of its balance sheet, with high-quality liquid assets and cash, and a superior risk-adjusted capital (RAC) ratio of 182.1% at year-end 2021--reflecting...

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