Research Update: Offshore Wind Giant Orsted A/S 'BBB+/A-2' Ratings Affirmed On Announced Sale Of Danish Power Distribution Assets

On Sept. 19, 2019, Orsted A/S agreed to divest its Danish power distribution (Radius), residential customer, and City Light businesses to SEAS-NVE for 21.3 billion Danish krones (DKK; about €2.9 billion). We view positively that proceeds will finance Orsted's very large capital expenditures (capex), especially in the U.S., although the sale is marginally negative in terms of business profile as these activities are relatively low risk. Following the sale, we expect Orsted's earnings to rely entirely from onshore and offshore wind projects in Europe, the U.S., and Taiwan, with almost all the capacity being contracted for at least 10 years. Therefore, on Sept. 23, 2019, S&P Global Ratings affirmed its 'BBB+' long-term issuer credit rating, on the company. At the

...- On Sept. 19, 2019, Orsted A/S agreed to divest its Danish power distribution (Radius), residential customer, and City Light businesses to SEAS-NVE for 21.3 billion Danish krones (DKK; about 2.9 billion). - We view positively that proceeds will finance Orsted's very large capital expenditures (capex), especially in the U.S., although the sale is marginally negative in terms of business profile as these activities are relatively low risk. - Following the sale, we expect Orsted's earnings to rely entirely from onshore and offshore wind projects in Europe, the U.S., and Taiwan, with almost all the capacity being contracted for at least 10 years. - Therefore, on Sept. 23, 2019, S&P Global Ratings affirmed its '###+' long-term issuer credit rating, on the company. - At the same time, S&P Global Ratings affirmed its '###+' senior unsecured debt, 'A-2' short-term, and '##+' subordinated debt ratings on Orsted. - The outlook is stable because the company will have some headroom for the rating...

Research Update