S&P Global Ratings has removed its CreditWatch negative on the 'BBB-' ratings on the debt issued by Southern Water (Finance) PLC, Southern Water’s financing vehicle, and assigned a negative outlook to the rating.
The ratings change follows Southern Water’s announcement that it has satisfied all the necessary conditions to receive the first £505 million tranche of the £655 million committed by its majority shareholder, funds managed by Macquarie Asset Management (MAM).
The ratings agency therefore expects the cash injection to be made by 28 November 2025.
S&P commented:
“While we consider that shareholder support will benefit the company’s liquidity position and credit metrics, we expect the latter will remain under pressure for the rest of the current regulatory period (2025-2030; AMP8) amid significant investment requirements and business plan execution risks.”
S&P has affirmed its 'AA' issue ratings on the senior secured debt guaranteed by Assured Guaranty UK Ltd. (AA/Stable/--). While the outlook on the guaranteed debt is stable, the negative outlook reflects the limited headroom over S&P’s 7% downside threshold over AMP8 and tight liquidity absent further measures.
Southern Water has met all the conditions to receive its shareholder’s equity support package, with a total of £655 million committed to date. On 9 October 2025 the group indicated it had received significant investor support on its proposed scheme of arrangement (SoA), sanctioned by the High Court of Justice of England and Wales and registered with Companies House on 10 October.
As a result, the watrr company implemented changes and waivers in respect of certain finance documents of the Southern Water Group, including the removal of the event of default in the finance documents, in the event that Class A debt is rated below investment grade by any two ratings agencies.
The group also confirmed that, following the successful sanctioning of the SoA, it will receive at least £655 million of equity led by its parent, funds managed by MAM by end of March 2026. Of this commitment, £505 million will be disbursed by 28 November, consistent with an equity commitment letter signed on 8 July 2025 as part of a lock-up agreement entered with financing creditors.
S&P comments:
“The shareholder's injection supports SWS’ liquidity profile, credit metrics, and ultimately the rating. We believe that SWS’ shareholder commitment to provide equity support has enhanced the company’s standing on the financial markets, as indicated by £850 million of new liquidity raised by the company in July 2025, including a £750 million seven-year 6.875% bond, with the order book being about five times oversubscribed. SWS’ good access to liquidity sources is, in our view, paramount to the rating over the current asset management period (AMP8), considering the significant amount of capital the company will have to deploy to execute its five-year business plan.”
However, the ratings agency cautioned that despite the recent equity injection and bond issuance, the group’s liquidity position remains strained. S&P says that with capex of approximately £1 billion over the next 12 months, coupled with a £350 million maturity in March 2026, it considers that the group's 12-month liquidity position remains tight despite considering £655 million of new equity. It also takes the view that the provisional determination from the CMA is “unlikely to significantly influence” Southewrn Water’s creditworthiness.
“We anticipate SWS will face challenges at the current rating level during AMP8 and likely require an additional equity injection,” S&P said.
PureTec Separations, the Ledbury-based water treatment engineering firm, has appointed Dan Norman as its new Sales Manager – Water Process Systems, supporting the company’s continued growth in the UK and international markets.
bNovate has launched BactoCloud, a secure cloud-based platform that connects and manages its BactoSense instruments, enabling real-time monitoring and optimization of microbial water quality.
Amiblu, a global leader in Glass Reinforced Plastic (GRP) pipe systems for wastewater, stormwater, drinking water, irrigation, hydropower, and industrial applications, has announced the appointment of Martyn Turton as its Sales Director for the UK & Ireland, driving strategic market development in the infrastructure and water sectors, effective immediately.
As a project manager at Metasphere, a Grundfos-owned remote telemetry company at the cutting edge of innovation, Fey McHarg, has witnessed firsthand how the intelligent harnessing of data, specifically through the data-as-a-service model, is fundamentally reshaping and revolutionising the water sector.
Hear how Scottish Water has completed its £235 million Ayrshire Glasgow Resilience Project - customers across Greater Glasgow, Ayrshire and East Renfrewshire will now benefit from a more secure and resilient water supply.
Hear how United Utilities is accelerating its investment to reduce spills from storm overflows across the Northwest.
Find out more about the remarkable career opportunities on offer at WSP - scroll down to watch the inspirational video.