European Commission mandates Scope to rate its creditworthiness
The European Commission has today mandated Scope, an EU-based credit rating agency (CRA), to rate its creditworthiness alongside its other mandated rating agencies. Through the appointment of Scope, the European Commission demonstrates its commitment to support competition in the market for credit ratings by inviting entrants. This is one of the objectives of the EU’s Credit Rating Agency rules. With this mandate Scope’s current AAA /Outlook stable unsolicited rating of the European Commission – which borrows on the capital markets on behalf of the EU – becomes a solicited rating. Commissioner Johannes Hahn in charge of budget and administration – and who is overseeing EU borrowing on capital markets, said: “With this decision, we are once again showing that we are living up to our principles and contribute to the strengthening of the European capital markets. The European Commission is using its prominence with regard to euro-denominated assets to strengthen the EU capital market.” Since October 2020, the European Commission has issued over €220 billion in highly-rated bonds to finance the SURE and NextGenerationEU programmes as well as back-to-back programmes to EU Member States and third countries. This includes €91.8 billion social bonds under the SURE programme and €28 billion of NextGenerationEU green bonds. The European Commission is currently rated AA /Outlook positive by Standard & Poor’s, Aaa /Outlook stable by Moody’s and AAA /Outlook stable by Fitch ratings, and has also been granted a AAA/Outlook stable unsolicited rating by DBRS. Thanks to its high credit rating, the Commission – on behalf of the EU – obtains favorable conditions for its issuances. The benefits are then being passed on to the EU Member States and third countries and lead to savings for the EU budget, depending on the nature and objectives of the funding programmes.
