UK water firms face tough market for new debt after Thames Water crisis

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Companies can expect higher borrowing costs as investors demand larger premium

Investors are demanding a higher premium to take on the debt of Britain’s most highly rated water companies in the wake of the crisis at Thames Water. Companies with stronger credit ratings, including Welsh Water, United Utilities and Anglian Water, have marketed or issued new sterling debt this week in the first significant wave of issuance since the parent company of Thames defaulted on its debt earlier this year.

” The same day, Anglian Water mandated BNP Paribas, HSBC and SMBC to market its own 20-year sterling green bond, with debt investors privately expecting the utility to have to pay a similar premium. The company said it was also exploring a 15 to 20-year inflation linked bond. “Issuers don’t know when the next Thames headline’s going to come out.

 

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