Moody’s changes Wales & West view

Moody’s Investors Service said it changed to negative its outlook on the backed senior secured notes maturing in 2021 issued by Wales & West Utilities Finance plc, the financing subsidiary of Wales & West Utilities Ltd.

The agency also affirmed the notes' Baa1 rating.

“The drivers for today's rating action are the expected decline in WWU's allowed returns and the likely reduction in earnings from tax outperformance from the start of the next regulatory period in the context of the group's relatively high borrowing costs as a result of its index-linked swap portfolio,” Moody’s said in a news release.

“Although the rated notes mature prior to the start of the period, the rating and outlook on the 2021 notes reflect our view of the underlying credit quality of WWU as guarantor of the notes.”

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