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Thames Water Woes Prompt £5 Billion Rescue Plan, Telegraph Says – bbg

UTILITIES
  • Report from Saturday’s Telegraph.
  • THAMES senior bonds among the worst performers in IG today, 5-10 wider and seemingly still finding a level.
  • Story is in line with recent news flow, which seems to point to opco debt remaining ringfenced. Nonetheless, the turmoil of a nationalisation would still impact the senior debt, with potentially negative regulatory changes. Tail risks remain for opco haircuts, with UK elections creating further uncertainty.
  • Thames issued £665mn net senior debt in late January, demonstrating ongoing market access for opco debt.
  • Kemble (Holdco) bonds (B3/CCC) already trade in deeply distressed territory (~39c) with upstream dividends looking unlikely for the foreseeable future.

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