### Ranking rationale #### 1) Entity A — Ørsted A/S: highest priority Ørsted is the clearest first-call candidate for a hybrid bond mandate. Key reasons: - **Already an established hybrid issuer:** Ørsted has existing hybrid capital of **DKK 19.8bn** at year-end 2022 and had hybrid coupon payments and hybrid capital issuance/repurchase activity in both 2021 and 2022. This means the market, documentation, rating-agency treatment, and investor base are already familiar. - **Recent hybrid refinancing / capital management activity:** In 2022 Ørsted issued **DKK 3.7bn** of hybrid capital and repurchased **DKK 1.9bn**, showing active hybrid management. This strongly supports a refinancing or extension mandate. - **Highly suitable sector:** Ørsted is a large renewable power / energy infrastructure issuer with long-dated asset cash flows and strong public-policy relevance. It fits the “Strongly Suitable” category. - **Large capex funding need:** PPE and construction-in-progress are very large, with continued expansion in production assets. Capex was **DKK 33.0bn** in 2022 versus operating cash flow of **DKK 11.9bn**, implying a structural external funding need. - **Credit metrics under pressure:** Long-term borrowings almost doubled from **DKK 31.5bn to DKK 60.5bn**, while net investment needs remain high. Hybrid issuance would help preserve adjusted leverage and rating headroom. - **High market credibility:** Ørsted has state ownership via the Danish state, a large institutional investor following, and demonstrated access to hybrid and senior debt markets. Overall, Ørsted combines **sector suitability, existing hybrid use, refinancing logic, capex need, and rating-headroom rationale**, making it the strongest origination target. --- #### 2) Entity B — Enel SpA: second priority Enel is also a strong candidate, but slightly behind Ørsted because the immediate 2022 hybrid refinancing signal appears less urgent. Key reasons: - **Very strong sector fit:** Enel is a global regulated / quasi-regulated utility with large electricity networks, generation, and retail operations. It fits squarely within the “Strongly Suitable” category. - **Existing hybrid issuer:** Enel has **EUR 5.6bn** of perpetual hybrid bonds in equity at year-end 2022. It issued **EUR 3.2bn** of hybrid bonds in 2021, with hybrid coupons of **EUR 123m** in 2022. - **Material leverage pressure:** Long-term borrowings increased from **EUR 54.5bn to EUR 68.2bn**, short-term borrowings also rose, and total liabilities increased to **EUR 177.5bn**. Equity was broadly flat/slightly down. Hybrid issuance would materially support adjusted leverage and rating headroom. - **Large capex and funding needs:** Enel invested heavily, with PPE capex of **EUR 11.3bn** and intangible capex of **EUR 2.0bn** in 2022. Operating cash flow of **EUR 8.7bn** did not cover investing cash outflows of **EUR 13.6bn**. - **Financial performance mixed:** Operating profit improved, but net profit attributable to owners fell from **EUR 3.2bn to EUR 1.7bn**, partly due to discontinued operations. This may increase rating-headroom sensitivity. - **Excellent market access:** Enel is one of Europe’s most established utility issuers and has proven hybrid market access. However, Enel did **not issue hybrids in 2022**, and the facts do not show a near-term hybrid call or repurchase equivalent to Ørsted’s active 2022 hybrid refinancing. Therefore, it is a very strong second priority rather than first. --- #### 3) Entity C — A2A Energia / A2A S.p.A.: third priority A2A is a plausible but lower-priority candidate. Key reasons: - **Utility / energy sector exposure:** A2A is in the Italian energy and utility sector, so the business has some infrastructure-like features and moderate cash-flow visibility. - **Smaller scale and less evident hybrid track record:** Unlike Ørsted and Enel, there is no explicit evidence of existing hybrid capital, hybrid coupon payments, or hybrid bond issuance. That makes origination more educational and less clearly refinancing-driven. - **Credit metrics have worsened:** Other noncurrent financial liabilities rose from **EUR 4.3bn to EUR 5.9bn**, and total liabilities increased from **EUR 13.7bn to EUR 16.9bn**. Leverage pressure exists. - **But operating profile is smaller and more exposed:** Revenue doubled due to energy price effects, while profit attributable to owners declined from **EUR 504m to EUR 401m**. EBITDA was stable at **EUR 1.5bn**, but net income weakened. - **Hybrid benefit likely moderate:** A hybrid could improve reported or adjusted leverage, but the case appears more opportunistic than urgent. There is no clear near-term call, refinancing catalyst, or demonstrated recurring hybrid funding strategy. - **Likely “Marginally Suitable” rather than “Strongly Suitable”:** The sector is supportive, but the absence of an existing hybrid instrument and smaller capital-markets profile make it less compelling than Ørsted or Enel. Thus A2A should be approached third, after the two larger and proven hybrid issuers. A,B,C