The ratings on Denmark-based DONG A/S are supported by its dominant incumbent market position; access to competitive long-term gas purchase contracts; significant monopoly operations; and a strong financial profile. Negative ratings factors include competitive exposure in the gas supply business, gas purchase concentration with volumes declining rapidly from 2012; significant exposure to the volatile oil and gas exploration and production (E&P) business; and aggressive medium-term growth objectives that are set to weaken both the business and, in particular, the financial risk profile. The Danish government is expected to privatize up to 49% of DONG in the medium term, enabling DONG to use equity to finance mergers and acquisitions. Providing 4 billion cubic meters (bcm) per year, DONG is the dominant
