S&P Global Ratings on July 26 downgraded KommuneKredit's long-term issuer credit rating to AA+ from AAA, with a stable outlook.

S&P also affirmed the Danish public-sector funding agency's A-1+ short-term issuer credit rating and removed the ratings from under criteria observation, where they were placed May 22 following the publication of new criteria for public-sector finance agencies.

The rating agency said it calculates that KommuneKredit would fall slightly short of the funding it would need to cover scheduled one-year term debt liabilities without access to capital markets. In a situation where such access were cut off, that would leave it in a position less favorable to that of AAA-rated peers.

S&P also noted a negative trend in KommuneKredit's capital adequacy, although it pointed to the agency's "very strong" market position and creditworthy borrowers.

The stable outlook reflects S&P's expectation that the company's guarantee structure will remain unchanged and it will continue to benefit from firm support from its local and regional government members.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings document referred to in this news brief can be found in the sources section.