Standard & Poor’s ratings agency has said that following the appeal by four U.K. water companies against Ofwat’s final determination for PR19 2020-2025, it considers the Competition and Markets Authority (CMA) provisional findings as generally credit positive.
S & P said it will review its ratings in early 2021, after it has reviewed the CMA's final decision and the plans from the three rated companies.
Currently all S & P ratings on the utilities that appealed to the CMA are either on CreditWatch with negative implications, or have a negative outlook.
According to the ratings agency, the main element of the CMA's provisional determination is the substantial increase in allowed return, to 3.50% from 2.96%. S & P anticipate the increase in WACC will lead to a rise in annual revenue of £25 million to £45 million over AMP7 on average for Anglian, Northumbrian, and Yorkshire Water.
However, the ratings agency is cautioning that it “remains aware” that the findings are still provisional.
“As a result, their ratings are on CreditWatch negative or have a negative outlook. Although credit metrics could improve, compared with the projections we based on inputs from Ofwat's FD, we still expect these U.K. water networks to face tougher operating conditions in AMP7 than in the current regulatory period, like the rest of the sector. The ratings remain under strain.”
The ratings agency said that once it has reviewed the CMA's FD in detail and discussed any potential mitigating plans with the companies that appealed, it will be in a better position to assess the credit impact on the companies.
Click here for more information
Enpure Ltd and Clean TeQ Water Ltd have announced a collaboration agreement to bring Clean TeQ Water's Moving Bed Ion Exchange-based nutrient removal technologies to water utilities across the UK.
Near-real-time microbial monitoring of wastewater discharge and bathing waters is now possible thanks to the BactoSense ID solution created by Swiss-based bNovate Technologies.
ABB has launched AquaMaster+™, a digital platform for smart water network management, designed to help water utilities monitor, analyze and manage their water networks, preventing pipeline water losses and optimizing operations.
Craig Nienaber, Business Development Manager for Safe Access Solutions (SAS) at HUBER Technology, explores why the company is seeing a growing level of interest in its safe access solutions for critical infrastructure providers, including their application in wastewater treatment assets.
Southern Water has released film and images showing what it’s like to walk inside Hampshire’s expanded Yew Hill underground reservoir for the very last time, before it gets filled with water.
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.