Moody's cuts Anglian Water view to negative

Moody's Investors Service said it changed to negative from stable the outlook on the £350 million 7% senior secured notes due 2018 issued by Anglian Water (Osprey) Financing plc and affirmed the Ba3 rating assigned to the notes.

The negative outlook reflects the risk that the ongoing price review for the U.K. water industry, which will set tariffs for the five-year period beginning April 1, 2015, will result in reduced financial flexibility and capacity to meet debt service obligations, the agency said.

Moody's expects the company to remain in a position to meet its debt service payments, recognizing also previous commitment from shareholders to support the business, but the agency said the negative outlook reflects the increased risk exposure to cash flow shortages should Anglian Water be faced with additional pressures such as low inflation, operational underperformance or cost overruns in its capex program.

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