Moody's downgrades Vestas

Danish wind turbine manufacturer’s rating drops from Baa1 to Baa2.
Photo: Henning Bagger
Photo: Henning Bagger

Vestas moves down the rating scale of credit rating agency Moody’s, which has lowered the long-term issuer rating from Baa1 to Baa2, according to a press release issued by Moody’s. 

”Moody’s decision to downgrade Vestas to Baa2 was triggered by weakening credit metrics and Vestas’ guidance for 2023 signaling that it will take the company longer than initially anticipated to digest the negative effect of the unprecedented raw material price increases combined with the challenge to improve the underlying profitability of the Power Solutions business,” says lead analyst of Vestas at Moody’s Oliver Giani.

Moody’s had signaled a possible downgrade in light of the previous assessment showing the outlook as ”negative”. Following the downgrade, the outlook has changed to ”stable”.

”The stable outlook mirrors Moody’s expectation that Vestas will be able to sustainably strengthen profitability and free cash flow generation so that it returns to solid profitability by 2024 at the latest. The mid- to long term market outlook for wind turbines remains strong, evidenced in a high order book, a fact that will benefit Vestas,” Giani notes. 

Vestas currently has two outstanding bonds of EUR 500m, issued in March 2022 and set to mature in 2029 and 2034. 

Moody’s rating scale goes from the top Aaa rating to a C rating, the lowest issuer rating. Baa2 is slightly above the middle of the scale.

Sign up for our newsletter

Stay ahead of development by receiving our newsletter on the latest sector knowledge.

Newsletter terms

Front page now

Further reading