Moody’s raises concerns over derivatives use
- From: Vol 11, Issue 7 (July 2010)
- Category: General
- Region: Europe
- Country: United Kingdom
- Related Companies: Moody’s
The ratings agency has warned that the creation of synthetic index-linked liabilities by UK water companies could leave them – and their investors – worryingly exposed.
The use of derivatives to swap fixedrate debt into index-linked liabilities could leave some of the more highly geared UK water and sewerage companies exposed to considerable financial risk, Moody’s ratings agency has warned.
The more debt-leveraged companies in the sector, such as Anglian, Dwr Cymru, Southern, Yorkshire, and Thames, turned to index-linked swaps after investor appetite for long-dated ...
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