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Water Companies Could Face Frosty Reception on UK Debt Markets

  • Public anger over leaks puts pressure on major utilities
  • Premiums expected to rise amid drought and political fallout

Extreme hot weather has exposed flaws in England’s water system -- and could make it harder for the country’s unpopular, privatized utilities to borrow money on the public markets.

UK water companies normally issue new bonds in the second half of the year, as firms return to debt markets after a summer slowdown. This year, however, investors are ready to demand higher yields, especially for providers lagging behind on their leakage targets.