Thames Water - credit deterioration but not taking position

All,

Please find our updated analysis here. 

Thames Water has until mid February 2020 to decide on appealing the price determination of OFWAT for the next 5yrs.  It is unlikely to be any ratings movement until that decision is made.  We don’t expect the Company to appeal, and although the credit metrics are likely to deteriorate over this upcoming regulatory review period, the Company’s adequate liquidity should limit the quantity of rating changes.  Additionally, the significant demand for long dated UK Utility paper, we see no added value in shorting Thames Water at current levels.  

Happy to discuss.  

Tomás