Research Update: Thames Water Class A And B Debt Ratings On Watch Negative On Management Transition, Unknown Timing Of Equity Injection

The resignation of Thames Water's CEO and the ensuing management transition could hinder the company's efforts to address its operational performance via its eight-year transformation plan. Additional equity injections from shareholders totaling £1 billion--critical to fund the transformation plan and included in our base case--are conditional upon continuing operational improvements, and their exact timing remains unknown. We therefore placed our 'BBB' and 'BB+' issue ratings on Thames Water's class A and class B debt on CreditWatch with negative implications. The CreditWatch placement indicates that we could lower the ratings by one notch in the absence of sufficient clarity on the management transition and timing of additional equity support from shareholders. The negative CreditWatch placement indicates that we could lower the

...- The resignation of Thames Water's CEO and the ensuing management transition could hinder the company's efforts to address its operational performance via its eight-year transformation plan. - Additional equity injections from shareholders totaling ú1 billion--critical to fund the transformation plan and included in our base case--are conditional upon continuing operational improvements, and their exact timing remains unknown. - We therefore placed our '###' and '##+' issue ratings on Thames Water's class A and class B debt on CreditWatch with negative implications. - The CreditWatch placement indicates that we could lower the ratings by one notch in the absence of sufficient clarity on the management transition and timing of additional equity support from shareholders....

Research Update