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UTILITIES: Thames Water (THAMES Baa3[N]): FY Results

UTILITIES

Slightly negative with updated assumptions. Ofwat on July 11th will be a key event

  • Gearing at 80.6%, in line with Moody’s range and below S&P’s 84% estimate from April.
  • Liquidity at £1.8bn, which it sees as sufficient to May 25 which is unchanged.
  • Reported senior PMICR (coverage) improved from 1.6x to 1.76x. The agencies use different adjustments; Moody’s expected unchanged to 0.4x better, S&P expected unchanged.
  • Continuing to seek new equity and credit. However, Thames longer assumes equity injection for its covenant forecasts which now show a trigger event in 2024/25. This would bring restrictions and preparation of a remedial plan but is not an event of default in itself.

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