Baden-Württemberg is one of the largest Bundesländer and an economic powerhouse, home to premium auto makers Porsche and Mercedes-Benz.

With Baden-Württemberg, Scope now rates six Bundesländer and more than half of outstanding Bundesländer bond volumes on a mandated basis.

The new rating underscores the growth of Scope’s sovereign and public-sector rating franchise as issuers seek an alternative to the oligopoly of US-based rating agencies.

“We want to strengthen a European rating perspective,” said Baden-Württemberg Finance Minister Danyal Bayaz in announcing the news on mandating Scope on Monday.

"So far, the rating market has been dominated by the large US agencies. A European rating agency is therefore a sensible addition. A further rating is also advantageous for us in terms of communication to the capital market,” Bayaz said.

Read the full press release (German) by Finanzministerium Baden-Württemberg

Background: Germany’s federal states are important players in European capital markets, as the largest sub-sovereign issuer group in Europe, issuing bonds worth EUR 42bn in 2023. The federal states also active in the Schuldschein private-debt market. In total, the volume of bonds outstanding issued by the 16 federal states at the end of 2023 stood at around EUR 431bn.

More news on Scope Group:

• ECB to include Scope’s ABS ratings in ECAF (June 2024)
• German Bundesländer mandate Scope Ratings (Feb 2024)
• ECB accepts Scope Ratings in its credit assessment framework ECAF (Nov 2023)
• Groupe BPCE becomes shareholder in Scope (Feb 2023)
• EU mandates Scope Ratings – AXA has become a strategic shareholder (June 2022)