Southern Water’s ratings head even further south
- From: Vol 12, Issue 7 (July 2011)
- Category: General
- Region: Europe
- Country: United Kingdom
- Related Companies: Moody’s and Southern Water
A ratings downgrade at Southern Water has moved the company one step closer to a dividend lock-up.
Moody’s downgraded Southern Water’s junior debt rating to junk status on 7th July, largely due to the risk arising from the company’s extensive use of index-linked swaps to hedge fixed-rate debt against inflation.
The rating agency last year highlighted the potential risks associated with these derivatives, which the highly geared companies in the sector have increasingly employed ...
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