Credit FAQ: What Lies Behind The Four Downgrades In The U.K. Water Sector During The First Half Of 2010? Nov 10
- ID: 2201968
- November 2010
- Region: United Kingdom, Great Britain
- Standard & Poors
The normally stable credit quality of rated U.K. water companies took something of a knock earlier this year, when Standard & Poor's Ratings Services downgraded four companies in the sector and revised the outlook on a related securitized transaction. The trigger for these actions was the start of a new, and in our view, relatively challenging, five-year pricing period on April 1, 2010. This change, introduced by sector regulator the Office of Water Services (Ofwat), illustrates an important caveat to our view of credit-supportive business risk--which we describe as excellent for the majority of rated issuers in the U.K. water sector--that of regulatory reset risk, when one review period transitions to another. We view the U.K. water sector as having...
Companies mentioned in this report are:
- United Utilities PLC
- Veolia Environnement S.A.
- Severn Trent PLC
- Sutton and East Surrey Water PLC
- Dwr Cymru (Financing) Ltd.
- Affinity Water Ltd.
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Research Type: Commentary
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