Thames Water: The Credit Take: Is the Creditor-Led Restructuring a Busted Flush?

Research evidence excerpt

Thames Water: The Credit Take: Is the Creditor-Led Restructuring a Busted Flush?

earlier position in 60 106

which it favoured a market led solution. By criticising the deal, one interpretation 104

is that she now believes the alternative SAR option would be the better long-term 55 103

solution. It is unclear if Reynolds’ comments represent the position of the whole Jun-25 Aug-25 Oct-25 Dec-25 Feb-26 Apr-26 Jun-26Government, or just Defra. We note that officials at the Treasury and at Number 10

have not directly opined. Either way, Reynolds’ criticisms that the creditor deal will Source: Bloomberg Finance L.P., JPM as of 16th Jun-26

affect customer bills and delay investment/environmental improvements, are not

inherently credible. We note that customer bills, allowed investment and Company overview: Thames Water is

environmental targets are all set by Ofwat in the price setting process every five

one of the 10 large Ofwat regulated water

years. Thames cannot directly make decisions on these variables. The factors that

groups in England and Wales, providing

Thames Water and its creditors do have control over, and which factor into the

water and wastewater services to 10m and

terms of the current deal, mainly relate to the company’s capital structure.

16m customers, respectively. The Ofwat

licensed entity is Thames Water Utilities

Another interpretation is that Reynolds’ comments are part of a Government effort

Ltd, which is a private company. Thamesto improve the terms of the current creditor deal. Given the political optics of letting

is the largest of the UK water groups bothinvestors take over an underperforming water company and potentially benefit

by customers and by Regulatory Capitalfrom lower environmental penalties, the Government is likely to want to drive a