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Thames Water(Baa3): Board to Meet

UTILITIES

• Bloomberg reports that the Thames Water board are set to meet Thursday.

• Revised business plan to be released on Friday.

• The challenge is to come up something that works for both shareholders and Ofwat, which seems unlikely. Thames need to try and find what concessions (if any) Owfat is willing to make.

• Spreads have shown some modest recovery from the wides. Cash prices in the high 80s on bonds with average coupons reflect high probability of a restructuring. Haircuts of 15-25% are expected under a SAR scenario.

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