Euler Hermes Rating Assigns BBB Preliminary Issuance Rating to Senior Bonds Issued Under Project Fortuna

HAMBURG, Germany, September 14, 2015 /PRNewswire/ --

Based on preliminary terms & conditions for the intended € 556 million bond issue, Euler Hermes Rating assigns a preliminary BBB issuance rating to the senior bonds. The preliminary status is subject to outstanding documents and draw-downs. The key drivers underlying the issuance rating are the moderate project risks combined with a moderate financial risk profile.

Project risks are moderate according to Euler Hermes Rating. Key drivers in the assessment are a combination of highly predictable cash flows, low regulatory risks, increased technical risks and low operating risks. The elimination of price risks through regulated feed-in tariffs and the mitigation of resource risks by the application of independent energy yield studies both contribute to a highly predictable and stable revenue stream in our opinion. Cash flow quality is further supported by a pre-settled operations & maintenance agreement with mostly fixed conditions by DONG Energy and supported by a yield based service warranty agreement with Siemens (S&P rating: A+). Risks associated with the market-/regulatory environment are generally low as the offshore wind industry will keep benefitting from strong regulatory support by the German government in view of the analysts. Euler Hermes Rating further believes that managing risks are low given DONG Energy's long standing track record and market-leading position in offshore wind, stable credit ratings, and commitment to the project and high-quality project partners. Technical risks associated with the limited track record of the wind turbine (SWT-6.0-154), a few remaining uncertainties regarding the total O&M-budget and lack of competitiveness compared with other regulated renewable energy sources are constraining factors in this rating category.

Financial risks are moderate in opinion of Euler Hermes Rating. Key drivers in the assessment are the sufficient coverage ratios for debt service under conservative rating case assumptions which could sustain severe downside scenarios on energy yield, park availability, wake losses, total O&M budget or permitted indebtedness at OpCo level without making use of reserve accounts. Scenario analysis also demonstrates a robust short-term liquidity profile which indicates a low default risk at project level according to the analysts.

Regarding potential modifiers, the analysts did not identify any constraining elements impacting on the overall rating outcome.

Further background information on this subject can be found at http://www.eulerhermes-rating.com

Euler Hermes Rating GmbH is registered as a credit rating agency (CRA) in accordance with Regulation (EC) No. 1060/2009 of the European Parliament and Council and is accredited by BaFin as an external credit assessment institution (ECAI).

Press contact:
Ralf Garrn - ralf.garrn@eulerhermes-rating.com
Euler Hermes Rating GmbH
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22763 Hamburg
Tel.: +49-040-8834-640
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