Orsted’s Rights Issue and US Risks: Credit View

Orsted's approved rights issue may be sufficient to stabilize credit quality, but only if it delivers the 8.1 GW capacity construction pipeline through 2027 without further delays or cost overruns. The stop-work order on Revolution Wind threatens to blow another hole in the funding plan and raises the risk that Sunrise Wind could be next. In the event of their termination, exit costs for both projects may exceed the rights issue buffer, which would put credit quality under extreme pressure and initiate a downward credit spiral if loan and credit facilities are triggered.