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Free AccessUTILITIES: Thames Water (THAMES Baa3[N]): Index Eligibility
- Class A bonds are rated Baa2[N]/BBB-*-. A downgrade to HY from S&P seems likely following Ofwat’s draft determination.
- Bloomberg reports that Thames bonds won’t be eligible for the ICE BofA High Yield indices due to the whole-business securitization structure. Nor are they currently eligible for ICE BofA IG indices. The composite rating is of the two ratings, so one notch from S&P alone would not affect the composite.
- ICE BofA indices seem to be relatively more widely tracked in HY than IG, at least for ETFs. That could imply worse technicals for THAMES following downgrades. The bonds would be eligible for Bloomberg and iBoxx indices to the best of our knowledge.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.