Decision comes after troubled UK utility reached tentative deal on £3bn of emergency financing
Troubled UK utility Thames Water has had its credit rating slashed further into “junk” territory after it reached a tentative deal with some creditors on £3bn of emergency financing that would rank ahead of existing debt. S&P on Monday cut the rating on Thames Water’s £16bn of top-rated debt by three notches, from CCC+ to CC, and downgraded the rating on its riskier class B debt two notches, from CCC- to C.
It is separately seeking to raise at least £3bn of equity from investors after its existing shareholders, a group of pension and sovereign wealth funds, said this year that the business was uninvestable and refused to inject more money. The group of class A creditors are offering to provide the £3bn of debt on a “super senior” basis, putting it ahead of all existing debt in an insolvency or “special administration” — a form of nationalisation.
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