Thames Water reaches deal with key Class B bondholders on recapitalisation plan

what happened

Thames Water said on Friday it had reached an agreement with key Class B creditors over a proposed recapitalisation. Holders of more than 60% of its junior Class B debt have given their support, moving forward the effort to restructure Britain's largest water utility.

Under the proposal, about £1 billion ($1.33 billion) of Class B debt would be written off. In return, those creditors would receive a recovery of roughly 5.9% through equity and other rights in the restructured company.

Thames Water also said discussions with the London & Valley Water consortium, Ofwat and other regulators are ongoing. No decision has yet been made on whether to proceed with the consortium's proposal.

why it matters

For markets, the size of the write-off and the dependence on regulators matter most. The outcome of these talks will shape how investors price the debt of Britain's water sector and the next steps in the company's restructuring. Source: ru.tradingview.com.

market impact

Thames Water debt and UK water utilities: debt write-off and reliance on regulatory approval weigh on the sector.

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