Fitch trims Wessex Water to BBB

Fitch Ratings said it downgraded Wessex Water Services Ltd.’s long-term issuer default rating to BBB from BBB+ and holding company Wessex Water Ltd.’s long-term IDR to BBB- from BBB. The outlooks are stable. Fitch also downgraded Wessex Water Service’s senior unsecured rating to BBB+ from A-. The company’s senior unsecured rating benefits from a one-notch uplift from the long-term IDR due to the regulated cash flows, which in the agency’s view would warrant above-average creditor recoveries upon default.

The downgrade reflects financial profile pressure from the next price control running from financial years to March 31, 2021 to 2025 as well as Wessex Water Service’s choice of financial policy. The company’s target pension-adjusted net debt-to-regulatory capital value is 72%, which is significantly above Fitch’s negative rating sensitivity of 67% for BBB+. Although Fitch expects some outperformance against the regulatory targets, added cash flow would not be sufficient to reduce gearing to below 67%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.