U.K. water and sewage utility Thames Water's operating performance in certain key regulatory areas continues to lag behind U.K. water regulated peers, which has led to regulatory penalties and fines. In response, management is spending more to improve operations and reducing dividend payments, but we anticipate weaker credit metrics until at least the end of the current regulatory period (2020). We are lowering our ratings on Thames Water's class A (senior) and class B (subordinated) debt to 'BBB+' and 'BBB-' from 'A-' and 'BBB', respectively. The stable outlook reflects the stability and predictability of U.K. water utilities' cash flows with each regulatory period, and the credit supportive measures implemented by the company. On July 24, 2017, S&P Global Ratings lowered
