Rival groups of bondholders are vying to extend loans to the troubled UK utility
In spring this year, Elliott Management, the $70bn US hedge fund known for circling distressed assets, alighted on a new target: Britain’s largest water company. After scooping up hundreds of millions of pounds of Thames Water’s debt from panicked asset managers willing to sell at a discount, Paul Singer’s Elliott is now one of several hedge funds engaged in a tussle over the future of the troubled utility.
The interest on the new debt would be funded from the proceeds of the loan itself rather than customer bills, those people also claimed. But it is also true that there is the potential for instant profits to the funds that participate: traders have already started quoting conditional prices on the new debt showing that they will buy and sell it well above face value.
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