Fitch Ratings has revised Orsted’s outlook to stable from negative while affirming the Danish utility’s long-term issuer default rating at BBB.
The senior unsecured debt rating is also confirmed at BBB and subordinated debt at BB+, Fitch said.
The agency said the decision follows the announcement of a €8bn (DKK60bn) capital increase, which it said should materially improve Orsted’s short-term financial flexibility and reduce reliance on asset farm-downs.
The announcement prompted S&P to downgrade Orsted’s credit rating while the company’s share price has fallen 30% and is yet to recover.
Fitch stated Orsted’s revised DKK35bn farm-down target for 2025–2026 is now seen as more achievable, although execution risks remain due to investor perceptions of higher risk.
Funds from operations (FFO) net leverage is expected to remain comfortably within sensitivities through 2026, averaging 2.3x, but will rise to nearly 3.0x in 2027 as the existing investment programme concludes and dividends are reinstated, Fitch stated.
Close to DKK40bn of the additional capital will allow Orsted to take full ownership of the Sunrise Wind project, while the remaining DKK20bn gives management more room to execute the asset rotation strategy, it added.
Ørsted has around 7GW under construction to the end of 2027, excluding Borkum Riffgrund 3, with about 4GW still fully owned, leaving it exposed to delays and cost overruns, the ratings agency added.
Fitch said timely disposal of a 50% stake in the 3GW Hornsea 3 project will be important.
The agency also noted better visibility of farm-downs following the exclusion of Sunrise Wind and financing for Greater Changhua 2. Ørsted expects more than DKK35bn of proceeds over 2025–2026, of which DKK7bn has already closed this year.
Fitch said Orsted’s business profile remains supported by a high-quality, largely contracted asset base, with about 80% of revenues contracted and most protected from inflationary pressures.
The Danish state’s proportional commitment to the capital increase highlights long-term investment support, though it is not considered sufficient to alter the rating construction.
Orsted has almost 9.5GW of installed offshore wind capacity, on average 51% owned, and has built a 6GW onshore wind and solar portfolio.
Liquidity was about DKK75bn at end-June 2025, including cash, liquid securities and committed credit lines, with the capital increase fully covering expected negative free cash flow after disposals for the next two to three years.
Fitch warned a downgrade could result from FFO net leverage above 3.7x, weaker interest cover, project cost overruns or a reduction of contracted revenues below 80%.
An upgrade would require greater visibility on long-term strategy, at least 80% of earnings from incentivised or contracted output, and leverage sustained below 3.0x.