Fortum Oyj

Several other disposals (€5.2 billion in total announced in the last 18 months) have also supported the improvement, including: €710 million in proceeds from the sale of Baltic district heating assets in March 2021 (transaction closed in July 2021); The €280 million sale of 500 megawatts (MW) of Indian solar assets, announced in June 2021 (transaction that will be closed partially during the second half of 2021 and partially in the first half of 2022); and €1.2 billion of disposals in 2020. These will all reduce Fortum's leverage, with adjusted debt to EBITDA decreasing well below 2.0x in 2021 from 3.3x in 2020. We expect adjusted FFO to debt will rebound to well above 40% in 2021 from 25.1% in

...Fortum's sale of its 50% stake in Stockholm Exergi Holding AB (publ) (###+/Stable/A-2) for 2.9 billion will lower leverage in 2021. Fortum expects the Exergi transaction to close by the end of 2021, which is factored into our base case. We see this transaction as a key milestone for management to improve Fortum's financial risk profile, as it will speed up the improvement of its credit ratios. We now expect credit ratios to be in line with the rating by year-end 2021, with notably S&P Global Ratings adjusted funds from operations (FFO) to debt above the 35% threshold for the current rating. This was the basis for our outlook revision to stable from negative on July 5, 2021 (see "Finnish Power Generator Fortum Oyj Revised To Stable On Progress With Disposals; `###' Rating Affirmed,," published on RatingsDirect on July 5, 2021). Several other disposals (5.2 billion in total announced in the last 18 months) have also supported the improvement, including:...

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