Erste Abwicklungsanstalt

Our stable outlook on EAA reflects that we do not expect changes to the ownership structure or strong commitment of NRW in the next two years. It also mirrors our outlook on NRW, signifying our expectation that the COVID-19-related weakening of the state's budgetary performance and debt accumulation will be temporary, and the debt burden relative to operating revenue will start declining again after 2021. We could lower our ratings on EAA if we conclude that NRW's budgetary performance failed to recover over the coming two-to-three years. Downward pressure on the ratings could also emerge if we revise downward our assessment of EAA's role for and link to NRW. An upgrade of NRW would trigger a similar rating action on

...Key strengths Key risks Public-policy role with good track record in facilitating the workout of former WestLB AG and winding up all transferred risk positions. Business limits as a nonbank workout entity. Integral link to the German State of North Rhine-Westphalia (NRW) because of the ownership structure and state support mechanism. Prospective increasing net losses due to shrinking asset base, leading to lower net interest income and higher capital depletion....

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